HomeMy WebLinkAboutAgenda Packet - Finance & Human Resources Committee - 10/10/2023FINANCE & HUMAN RESOURCES COMMITTEE
OCTOBER 10, 2023
East Valley Water District was formed in 1954 and provides water and wastewater services to
103,000 residents within the cities of San Bernardino and Highland, and portions of San
Bernardino County.
EVWD operates under the direction of a 5member elected Board.
COMMITTEE MEMBERS
David E. Smith
Governing Board Member
Ronald L. Coats
Governing Board Member
Finance & Human Resources Committee Meeting
October 10, 2023 1:30 PM
31111 Greenspot Road, Highland, CA 92346
www.eastvalley.org
PLEASE NOTE:
Materials related to an item on this agenda submitted to the Board after distribution of the
agenda packet are available for public inspection in the District’s office located at 31111
Greenspot Rd., Highland, during normal business hours. Also, such documents are available
on the District’s website at eastvalley.org and are subject to staff’s ability to post the
documents before the meeting.
Pursuant to Government Code Section 54954.2(a), any request for a disabilityrelated
modification or accommodation, including auxiliary aids or services, that is sought in order
to participate in the above agendized public meeting should be directed to the District Clerk
at (909) 8854900 at least 72 hours prior to said meeting.
In order to comply with legal requirements for posting of agenda, only those items filed
with the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesday
meeting not requiring departmental investigation, will be considered by the Board of
Directors.
CALL TO ORDER
PLEDGE OF ALLEGIANCE
ROLL CALL OF BOARD MEMBERS
PUBLIC COMMENTS
Any person wishing to speak to the Board of Directors is asked to complete a Speaker Card
and submit it to the District Clerk prior to the start of the meeting. Each speaker is limited to
three (3) minutes, unless waived by the Chairman of the Board. Under the State of California
Brown Act, the Board of Directors is prohibited from discussing or taking action on any item
not listed on the posted agenda. The matter will automatically be referred to staff for an
appropriate response or action and may appear on the agenda at a future meeting.
INFORMATIONAL ITEMS
1.Review the Draft Annual Comprehensive Financial Report for Fiscal Year 202223
2.Review Resolution 2023.15 Updating Water Capacity Fees
REPORTS
3.Finance Activities
4.Human Resource Activities
ADJOURN
FINANCE & HUMAN RESOURCES COMMITTEEOCTOBER 10, 2023East Valley Water District was formed in 1954 and provides water and wastewater services to103,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5member elected Board.COMMITTEE MEMBERS
David E. Smith
Governing Board Member
Ronald L. Coats
Governing Board Member
Finance & Human Resources Committee Meeting
October 10, 2023 1:30 PM
31111 Greenspot Road, Highland, CA 92346
www.eastvalley.org
PLEASE NOTE:
Materials related to an item on this agenda submitted to the Board after distribution of the
agenda packet are available for public inspection in the District’s office located at 31111
Greenspot Rd., Highland, during normal business hours. Also, such documents are available
on the District’s website at eastvalley.org and are subject to staff’s ability to post the
documents before the meeting.
Pursuant to Government Code Section 54954.2(a), any request for a disabilityrelated
modification or accommodation, including auxiliary aids or services, that is sought in order
to participate in the above agendized public meeting should be directed to the District Clerk
at (909) 8854900 at least 72 hours prior to said meeting.
In order to comply with legal requirements for posting of agenda, only those items filed
with the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesday
meeting not requiring departmental investigation, will be considered by the Board of
Directors.
CALL TO ORDER
PLEDGE OF ALLEGIANCE
ROLL CALL OF BOARD MEMBERS
PUBLIC COMMENTS
Any person wishing to speak to the Board of Directors is asked to complete a Speaker Card
and submit it to the District Clerk prior to the start of the meeting. Each speaker is limited to
three (3) minutes, unless waived by the Chairman of the Board. Under the State of California
Brown Act, the Board of Directors is prohibited from discussing or taking action on any item
not listed on the posted agenda. The matter will automatically be referred to staff for an
appropriate response or action and may appear on the agenda at a future meeting.
INFORMATIONAL ITEMS
1.Review the Draft Annual Comprehensive Financial Report for Fiscal Year 202223
2.Review Resolution 2023.15 Updating Water Capacity Fees
REPORTS
3.Finance Activities
4.Human Resource Activities
ADJOURN
FINANCE & HUMAN RESOURCES COMMITTEEOCTOBER 10, 2023East Valley Water District was formed in 1954 and provides water and wastewater services to103,000 residents within the cities of San Bernardino and Highland, and portions of SanBernardino County.EVWD operates under the direction of a 5member elected Board.COMMITTEE MEMBERSDavid E. SmithGoverning Board Member Ronald L. CoatsGoverning Board MemberFinance & Human Resources Committee MeetingOctober 10, 2023 1:30 PM31111 Greenspot Road, Highland, CA 92346www.eastvalley.orgPLEASE NOTE:Materials related to an item on this agenda submitted to the Board after distribution of theagenda packet are available for public inspection in the District’s office located at 31111Greenspot Rd., Highland, during normal business hours. Also, such documents are availableon the District’s website at eastvalley.org and are subject to staff’s ability to post thedocuments before the meeting.Pursuant to Government Code Section 54954.2(a), any request for a disabilityrelatedmodification or accommodation, including auxiliary aids or services, that is sought in orderto participate in the above agendized public meeting should be directed to the District Clerkat (909) 8854900 at least 72 hours prior to said meeting.
In order to comply with legal requirements for posting of agenda, only those items filed
with the District Clerk by 12:00 p.m. on Wednesday prior to the following Wednesday
meeting not requiring departmental investigation, will be considered by the Board of
Directors.
CALL TO ORDER
PLEDGE OF ALLEGIANCE
ROLL CALL OF BOARD MEMBERS
PUBLIC COMMENTS
Any person wishing to speak to the Board of Directors is asked to complete a Speaker Card
and submit it to the District Clerk prior to the start of the meeting. Each speaker is limited to
three (3) minutes, unless waived by the Chairman of the Board. Under the State of California
Brown Act, the Board of Directors is prohibited from discussing or taking action on any item
not listed on the posted agenda. The matter will automatically be referred to staff for an
appropriate response or action and may appear on the agenda at a future meeting.
INFORMATIONAL ITEMS
1.Review the Draft Annual Comprehensive Financial Report for Fiscal Year 202223
2.Review Resolution 2023.15 Updating Water Capacity Fees
REPORTS
3.Finance Activities
4.Human Resource Activities
ADJOURN
Agenda Item
#1
October 10, 20231
Meeting Date: October 10, 2023
Agenda Item #1
Informational Item
1
2
7
1
Regular Meeting
TO: Committee Members
FROM: Chief Financial Officer
SUBJECT: Review the Draft Annual Comprehensive Financial Report for Fiscal Year
2022-23
RECOMMENDATION
That the Finance and Human Resources Committee recommend to the Board of
Directors to approve the attached Draft Annual Comprehensive Financial Report for
Fiscal Year 2022-23.
BACKGROUND / ANALYSIS
Each year, the District contracts with an external audit firm to conduct an annual audit
of the District’s books and records for the current fiscal year in compliance with
California Water Code §30540(b)(2). The audit is both an industry best practice and a
requirement of the State Controller Minimum Audit Requirements for California Special
Districts.
On July 11, 2023, the audit partner from Rogers, Anderson, Malody & Scott (RAMS) met
with the District’s Finance and Human Resources Committee to review the auditing
services to be provided during the audit for fiscal year ended June 30, 2023. In
addition, RAMS described the procedures that were to be used to perform their audit in
accordance with generally accepted auditing standards (GAAS).
Once the audit is complete, the final requirement under Statement of Auditing
Standards 114 (SAS 114) is for the auditors to communicate to those charged with
governance:
•Their views about qualitative aspects of the entity's significant accounting
practices, including accounting policies, accounting estimates, and financial
statement disclosures;
•Significant difficulties, if any, encountered during the audit;
•Uncorrected misstatements, other than those the auditor believes are trivial, if
any;
•Disagreements with management, if any; and
•Other findings or issues, if any, arising from the audit that are, in the auditor's
professional judgement, significant and relevant to those charged with
governance regarding their oversight of the financial reporting process.
Agenda Item
#1
October 10, 20232
Meeting Date: October 10, 2023
Agenda Item #1
Informational Item
1
2
7
1
Attached is a draft of the 2022-23 Annual Comprehensive Financial Report (Annual
Report) for the Committee’s review. The Annual Report includes the District’s annual
financial statements with accompanying note disclosures, management discussion and
analysis, and statistical information compiled by staff.
The 2022-23 Annual Report will receive an unmodified opinion from RAMS. An
unmodified opinion indicates the financial data of the District is presented fairly. RAMS
conducted an audit in accordance with auditing standards generally accepted in the
United States of America and guidelines established by the California State Controller
for Special Districts.
In addition, the District will apply for the Government Finance Officers Association
(GFOA), Certificate of Achievement for Excellence in Financial Reporting to ensure the
District’s Annual Report once again meets high standards in governmental accounting
and financial reporting.
On August 25, 2023 GFOA notified staff that the June 2022 Annual Report is in the final
review process. Staff is confident that the District will receive the GFOA award for the
11th consecutive year.
AGENCY GOALS AND OBJECTIVES
II - Maintain a Commitment To Sustainability, Transparency, and Accountability
A. Practice Transparent and Accountable Fiscal Management
FISCAL IMPACT
There is no fiscal impact associated with this agenda item.
Respectfully submitted:
________________
Brian Tompkins
Chief Financial Officer
ATTACHMENTS
Draft Annual Report 2023
Annual Comprehensive Financial Report
Fiscal Year Ended
June 30, 2023
East Valley Water District
Prepared by: Finance Department
31111 Greenspot Road
Highland, CA 92346
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2023
Table of Contents
1
Page No.
Introductory Section
Letter of Transmittal....................................................................................................... 5-8
Organizational Structure .................................................................................................... 9
Principal Officials ............................................................................................................. 10
GFOA Certificate ............................................................................................................ 11
Financial Section
Independent Auditors’ Report ...................................................................................... 13-15
Management’s Discussion and Analysis ......................................................................... 16-28
Basic Financial Statements
Statement of Net Position ......................................................................................... 31-32
Statement of Revenues, Expenses, and Changes in Net Position ................................... 33-34
Statement of Cash Flows ........................................................................................... 35-36
Notes to the Basic Financial Statements ..................................................................... 37-66
Required Supplementary Information
Schedule of District’s Proportionate Share of the Net Pension Liability ............................... 69
Schedule of District’s Contributions ................................................................................ 70
Schedule of Changes in the Net OPEB Liability ............................................................ 71-72
Schedule of OPEB Healthcare Contributions .................................................................... 73
Notes to the Required Supplementary Information .......................................................... 74
Supplementary Information
History and Organization ............................................................................................... 78
Combining Schedule of Net Position ........................................................................... 79-80
Combining Schedule of Revenues, Expenses, and Changes in Net Position .................... 81-83
Combining Schedule of Cash Flows ............................................................................ 85-86
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2023
Table of Contents
2
Page No.
Statistical Information Section
Financial Trends
Changes in Net Position by Component – Last Ten Fiscal Years .................................... 91-92
Operating Revenue by Source – Last Ten Fiscal Years ..................................................... 93
Water Operating Expenses – Last Ten Fiscal Years .......................................................... 94
Wastewater Operating Expenses – Last Ten Fiscal Years ................................................. 95
Water Reclamation Operating Expenses – Last Ten Fiscal Years ....................................... 96
Revenue Capacity
Water Sales and Production – Last Ten Fiscal Years ........................................................ 97
Revenue Rates for Water – Last Ten Fiscal Years ...................................................... 99-100
Revenue Rates for Wastewater – Last Ten Fiscal Years ............................................ 101-102
Active Services by Type – Last Ten Fiscal Years ............................................................. 103
Principal Customers – Current Fiscal Year and Nine Years Ago......................................... 104
Debt Capacity
Ratio of Outstanding Debt – Last Ten Fiscal Years .......................................................... 105
Debt Service Coverage – Last Ten Fiscal Years............................................................... 106
Demographic Information
Demographic and Economic Statistics – Last Ten Calendar / Fiscal Years ......................... 107
Operating Information
Full-Time Equivalent Employees by Department – Last Ten Fiscal Years ........................... 108
Operating and Capacity Indicators for Water and Wastewater – Last Ten Fiscal Years ....... 109
Other Information
Capacity Charge Funds ............................................................................................ 111-114
3
4
5
October 25, 2023
To the Board of Directors and Customers of East Valley Water District,
We are pleased to submit the Annual Comprehensive Financial Report (Annual Report) for East Valley Water District
for the year ended June 30, 2023. This report was prepared by District staff in accordance with standards
established by the Governmental Accounting Standards Board (GASB).
The District’s management is responsible for the presented data, and the completeness and fairness of the
presentation, including the note disclosures. We believe that the report presented is accurate in all material
respects, and that the financial statements and other information are presented in a manner that enables readers
to gain a full understanding of the District’s financial activities for the year. Readers should also refer to the
Management’s Discussion and Analysis in the Financial Section of the Annual Report for a detailed discussion
regarding the District’s financial condition and results of operations.
The Annual Report follows the guidelines recommended by the Government Finance Officers Association (GFOA)
of the United States and Canada. In November 2023, the District will, again, submit the Annual Report to this
organization for review and possible recognition for achievement in reporting excellence.
Background
East Valley Water District (the District) was formed on January 18, 1954, and since then, has provided retail water
service to customers in an expanding service area which now covers 30.1 square miles. The District directly serves
treated water to approximately 104,000 people in the City of Highland, the eastern portion of the City of San
Bernardino, the San Manuel Band of Mission Indians, and portions of the County of San Bernardino. In 1964, the
District began providing wastewater collection services to the same service area.
As of June 30, 2023, the District had 21,679 water connections and 19,831 wastewater connections.
Water Supply and Reliability
The District’s water supply for the year ended June 30, 2023 includes groundwater (80.8 percent), surface water
(6.9 percent), and imported water (12.3 percent). Groundwater is pumped from the Bunker Hill Basin, and surface
water from the Santa Ana River is diverted based on rights acquired from the North Fork Water Company.
6
Local Economy
East Valley Water District is located within San Bernardino County in a metropolitan area referred to as the “Inland
Empire”. Since 2014, the District’s population has grown by more than 9 percent and currently, comprised of mostly
residential and commercial customers, with no major industrial users. Large consumers remain consistent year to
year with the San Bernardino City Unified School District, Patton State Hospital, City of Highland, San Manuel Indian
Bingo & Casino, and Village Lakes Homeowners Association forming the list of top five users.
In 2023, the average household income within the District’s service area was $56,514, approximately 22% lower
than the County of San Bernardino. Customers who reside in the City of Highland account for approximately 65%
of the District’s customer base. These customers had an average household income of $68,105, approximately 21%
higher than the overall District average.
Financial Management
The District manages its resources conservatively to deliver safe and reliable services to its customers at a fair and
cost-effective price. It focuses on establishing fair rates, cost containment, long-term planning, maintaining and
upgrading infrastructure, and pursuing alternative source of funding. This approach has allowed the District to
undertake substantial capital improvement projects during tough economic times, while passing a series of modest
rate increases. The keys to the District’s successful financial management are the District’s Capital Improvement
and Financial Plan (CIFP), comprehensive reviews of water and wastewater rates, and the annual budget process.
The CIFP provides a comprehensive view of infrastructure investments necessary over a seven-year period to
ensure that water resources are adequate, water quality is maintained, and the water and wastewater service
needs of current and future customers are met. The CIFP is reviewed annually by the District’s Board of Directors
(Board) during the budget process, at which time the highest priority projects are adopted and receive authorization
for expenditure along with the District’s operating budget.
The District’s financial planning also includes the establishment and funding of reserves, and the pursuit of
alternative funding sources, both of which help reduce reliance on rates and rate increases. In recent years the
District has been very successful in pursuing project funding from the State Revolving Fund and Federal Emergency
Management Agency (FEMA), and have applied for water and energy efficiency project funding from the Bureau of
Reclamation and Edison.
80.8%
6.9%
12.3%
Water Supply Sources
Groundwater
Surface Water
Imported
7
Internal Control
District management is responsible for establishing a system of internal accounting controls designed to provide
reasonable assurances that assets of the District are safeguarded against losses from unauthorized use or
disposition, and theft. The District’s internal controls also ensure the proper recording of financial transactions, and
the preparation of financial statements in accordance with Generally Accepted Accounting Principles (GAAP). The
District’s internal control structure is designed to provide reasonable assurance that these objectives are met. The
concept of reasonable assurance recognizes that 1) the cost of a control should not exceed the benefits likely to be
derived and 2) the valuation of costs and benefits requires estimates and judgments by management.
Budgetary Control
The District’s Board of Directors annually adopts a balanced operating and capital budget prior to the new fiscal
year. The budget authorizes expenditures and provides a basis for accountability over the District’s enterprise
operations and capital projects. Each quarter, management provides the Board with a quarterly budget review to
allow Board assessment of staff’s progress in meeting goals and objectives, and budget adjustments, if necessary,
are requested at the mid-year budget review in February.
Debt Administration
The District utilizes proceeds from long-term debt, along with reserves and contributions from the operating budget,
to finance major construction projects. Current debt consists of Revenue Bonds and loans from US Bancorp, the
State Revolving Fund, and the San Bernardino Valley Municipal Water District.
The District received a credit rating of AA- from Standard and Poor’s and Fitch when the Revenue Bonds were
issued in September 2020. This rating was affirmed by Standard and Poor’s Global Rating as the result of a review
conducted in January 2023.
Investment Policy
The Board of Directors annually adopts an investment policy that conforms to California State Law, District
ordinances and resolutions, and the prudent person standard. The objectives of the policy are safety, liquidity, and
yield. District funds are normally invested in the State Treasurer’s Local Agency Investment Fund (LAIF), and
Federal government Treasury notes or agency obligations.
Audit and Financial Reporting
State law requires the District to obtain an annual audit of its financial statements by an independent Certified
Public Accountant. This year, the District’s Financial statements were audited by Rogers, Anderson, Malody & Scott,
LLP from San Bernardino, California. Their audit opinion is included in the Basic Financial Statements section of this
report.
The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the District for its Annual Comprehensive Financial Report for
the fiscal year ended June 30, 2021. This was the tenth year that the District has achieved this prestigious award.
To be awarded a Certificate of Achievement, a governmental entity must publish an easily readable and efficiently
organized Annual Comprehensive Financial Report. This report must satisfy both GAAP and applicable legal
requirements.
8
A Certificate of Achievement is valid for a period of one year only. We believe that our current Annual
Comprehensive Financial Report continues to meet the Certificate of Achievement Program requirements and we
are submitting it to the GFOA to determine its eligibility for another certificate.
Acknowledgements
Preparation of this report was accomplished by the combined efforts of District staff. We appreciate the dedication
and professionalism that our staff bring to the District. We would also like to thank the members of the Board of
Directors for their continued support in the planning and implementation of the financial affairs of the District.
Respectfully submitted,
Michael Moore
General Manager/CEO
Brian W. Tompkins
Chief Financial Officer
EAST VALLEY WATER DISTRICT
Organizational Structure
Year Ended June 30, 2023
9
EAST VALLEY WATER DISTRICT
Principal Officials
Year Ended June 30, 2023
10
Vision
Enhance and preserve the quality of life for our community through innovative leadership and
world class public service.
Core Values
Leadership: Motivating a group of people to act towards achieving a common goal or
destination.
Partnership: Developing relationships between a wide range of groups and individuals
through collaboration and shared responsibility.
Stewardship: Embracing the responsibility of enhancing and protecting resources
considered worth caring for and preserving.
East Valley Water District
Governing Board Members as of June 30, 2023
Name Title
Elected /
Appointed Current Term
Phillip R. Goodrich Chairman of the Board Elected 2022 - 2026
James Morales, Jr.Vice-Chairman of the Board Elected 2022 - 2026
David E. Smith Governing Board Member Elected 2020 - 2024
Ronald L. Coats Governing Board Member Elected 2022 - 2026
Chris Carrillo Governing Board Member Elected 2020 - 2024
Contact Information
East Valley Water District
Michael Moore, General Manager/CEO
31111 Greenspot Road
Highland, CA 92346
(909) 889-9501
www.eastvalley.org
EAST VALLEY WATER DISTRICT
GFOA Certificate
Year Ended June 30, 2021
11
12
EAST VALLEY WATER DISTRICT
Independent Auditor’s Report
Year Ended June 30, 2023
13
EAST VALLEY WATER DISTRICT
Independent Auditor’s Report
Year Ended June 30, 2023
14
EAST VALLEY WATER DISTRICT
Independent Auditor’s Report
Year Ended June 30, 2023
15
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
16
The District
East Valley Water District (District) is a California Special District established under section 30000 et seq. of the
California Water Code. The District is engaged in pumping, treating, and distributing water to its customers, as well
as maintaining a collection system for residential and commercial wastewater that is delivered for treatment at a
plant owned by the City of San Bernardino Water Department.
The District serves the City of Highland and portions of the City and County of San Bernardino in California.
The Basic Financial Statements
East Valley Water District is a special-purpose government agency, engaged in activities that are supported
exclusively by user charges. As such, the District’s financial statements are presented in the format prescribed for
proprietary funds by the Governmental Accounting Standards Board (GASB).
The following financial statements for the year ended June 30, 2023 (2022 for comparative purposes only) consist
of three interrelated statements designed to provide the reader with relevant, understandable data about the
District’s financial condition and operating results. They are the Statement of Net Position, the Statement of
Revenues, Expenses, and Changes in Net Position, and the Statement of Cash Flows.
The Statement of Net Position presents financial information on the District’s assets, liabilities, and deferred inflow
and outflows of resources, with the difference reported as net position as of the last day of the District’s fiscal year.
Over time, increases or decreases in net position can serve as a useful indicator of whether the financial position
of the East Valley Water District is improving or deteriorating.
The Statement of Revenues, Expenses, and Changes in Net Position presents information showing how the District’s
net position changed during the most recent fiscal year. All changes in net position are reported as soon as the
underlying event giving rise to the change occurs, regardless of the timing of the related cash flows.
The Statement of Cash Flows (direct method) conveys to financial statement users how the District managed cash
resources during the year. This statement converts the change in net position presented on the Statement of
Revenues, Expenses, and Changes in Net Position into actual cash provided by or used for operations. The
Statement of Cash Flows also details how the District obtains cash through financing and investing activities, and
conversely, how cash is spent for these purposes.
Summary Financial Information and Analysis
Financial Condition
During the year ended June 30, 2023, the District’s total assets and deferred outflows increased by $24.5 million,
to $385.1 million. The increase was the combined result of increases to both Current assets and Capital assets.
Current assets increased $9.0 million (25%) to $45.4 million. While the increase is a net between increases and
decreases of the various current asset line items, the primary reason for the increase was in the amount Due From
Other Governments, which grew from $10.3 million to $20.5 million. This category recognizes outstanding
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
17
reimbursement claims from the state revolving fund for loan eligible construction activity on the Sterling Natural
Resource Center (SNRC), or reimbursements receivable from partner agencies in the construction of regional
recycled water facilities.
Utility Accounts Receivable balances fell 14.8% to $5.9 million for two reasons. First, the District resumed full
collection efforts on delinquent accounts, up to and including service disconnection, which is the District’s most
effective tool for collections. The Governor’s moratorium on disconnections for non-payment between April of 2020
and December 2021 allowed some customers to accumulate delinquent balances for up to two years, balances that
they would not be able to pay without financial assistance. Securing external financial assistance was the second
tool that helped lower customer balances, which the District facilitated by enrolling in two programs - CAPP and
LIHWAP. The California Arrearage Payment Program (CAPP) supplied state funds which could be applied to
customer account balances incurred over a qualifying period during the pandemic. More recently the District enrolled
in the Low Income Household Water Assistance Program (LIHWAP) which supplied federal funds to pay customer
account balances if they were eligible, based on income thresholds. More than $600 thousand in external funding
has been applied to customer balances through June 2023.
Inventory balances remained level, increasing just 3.2% to $974 during FY 2022-23.
Restricted Asset balances increased from $11.0 to $12.4 million. The increase is the result of significant
development activity and the related collection of restricted development impact fees. Restricted assets do not
include large retentions held on the construction contract of the Sterling Natural Resource Center, as payment of
the retentions will be made with loan proceeds borrowed from the state revolving fund (converted to Long Term
debt) rather than paid out of current financial resources.
2023 2022
Current Assets 45.4$ 36.4$
Restricted Assets 12.4 11.0
Other Assets 0.3 0.3
Capital Assets - Net 319.7 309.2
Total Assets 377.8 356.9
Total Deferred Outflow of Resources 7.3 3.7
Current Liabilities 26.4 21.0
Non-Current Liabilities 207.9 186.9
Total Liabilities 234.3 207.9
Total Deferred Inflows of Resources 3.0 7.6
Net Position
Net Investment in Capital Assets 112.9 117.1
Restricted 10.8 9.1
Unrestricted 24.1 18.9
Total Net Position 147.8$ 145.1$
Capital Assets increased by $10.5 million during the 2022-23 fiscal year. For purposes of the table above, Capital
Assets includes construction in progress (CIP), utility plant in service, and the related accumulated depreciation.
Changes in Capital Assets included additions of $16.8 million, Net of Asset Retirements with a book value of $0.01
million and an annual depreciation charge of $6.3 million. Capital additions during the year were primarily
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
18
Construction in Progress on the SNRC. A more detailed description of capital spending is in the Capital Assets
section of this analysis.
Total Deferred Outflow of Resources consists of pension contributions made after the most recent pension plan
actuarial valuation, as well as differences between projected and actual earnings on pension plan investments and
changes in assumptions. Investment losses of 6.1% on pension plan assets during the plan year ended June 2022,
compounded by actuarial assumptions that the assets would earn 6.8%, led to a significant increase in Deferred
Outflows-Pensions for 2022-23 of $3.3 million. This amount was accompanied by an increase in Deferred Outflows
related to Other Post Employment Benefits (OPEB) of $0.3 million.
As current assets increased by $9.0 million, current liabilities also increased by $5.1 million, the result of a growing
retentions payable balance and an increase of $3.1 million in year-end vendor payables compared to the prior year
end. These increase in the current balances resulted in no change to the District’s current ratio which remained at
1.7:1. However, by removing $10.6 million in retentions payable related to the SNRC from the calculation, the
current ratio improves to 2.9:1. Justification for removing the SNRC retentions payable from the calculation is that
when the contractor is paid the retention, the District will request a draw against its SRF loan for the retentions,
rather than drawing on District financial resources, in effect converting retentions to long-term debt.
Non-Current Liabilities increased by $20.9 million, the net effect of:
• $16.1 million in draws on the State Revolving Fund loan for the SNRC; plus
• $(2.5) million in principal payments and premium amortization;
• $(0.1) million decrease in Long-Term Debt amounts classified as Current Liabilities;
• $0.2 million increase in Compensated Absences and Other Post-Employment Benefit obligations calculated
in accordance with GASB statement 75 (retiree medical); and
• $7.2 million increase in unfunded pension benefit obligations due to extraordinary losses on pension plan
assets held by CalPERS for the year ended June 2022, the date of the valuation on which current obligations
are calculated.
Pensions and OPEB (Other Post Employment Benefits) are further discussed in Notes 8 and 11 of the accompanying
financial statements. Long-Term Debt and Compensated Absences are further explained in financial statement
Notes 5 and 6, respectively.
The District’s total Net Position was $147.8 million at the end of fiscal year 2023, a $2.7 million increase compared
to the end of the previous fiscal year. Of the $147.8 million Net Position balance, $112.9 million is categorized as
Net Investment in Capital Assets, $10.8 million is Restricted for Capital Expansion Projects, and $24.1 million is
Unrestricted. The calculation of Net Investment in Capital Assets is included in Note 7 of the accompanying financial
statements.
Looking at longer term results, the District’s total Net Position has increased $24.5 million and $25.7 million over
five and ten year periods, respectively.
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
19
Results of Operations and Changes in Net Position
Water Operations
Water sales for fiscal year 2022-23 decreased 8.0% to $17.0 million, the result of a decrease in water demand by
customers from 17,998 acre-feet in 2021-22, to 15,341 acre-feet. The significant decline in demand, or
consumption, is attributable to historic levels of snowfall and rain in California during the winter of 2023. Locally,
the District’s weather station in Highland, California recorded 24.03 inches of rain from July 2022 to June 2023,
compared to 10.44 inches recorded in the previous fiscal year.
Sales revenue of $17.0 million fell short of 2022-23 projections of $17.7 million. Projections are based on historical
usage, and follow a predictable pattern, but again, extraordinary levels of rain throughout the winter months
suppressed demand for water, especially water used for irrigation. Sales for irrigation purposes fell by approximately
21%, while residential usage decreased by approximately 15%. Usage by commercial / business customers had
the smallest decline in usage at about 5%.
Total water produced by the District during the year was 16,408 acre feet, with the difference between water
produced and water sold of 1,067 acre feet (6.5%) being the result of District flushing programs, water use at
District facilities, and system leaks. The District, like all California water agencies, participates in an annual water
audit to identify and work to mitigate unidentified water losses from the District’s water distribution system.
The other major water operating revenue collected by the District is Water System, or Meter Charge revenue. Meter
Charge revenue grew by 6.9% to $9.8 million for fiscal year 2022-23. The increase was due to a 3% rate increase
that became effective in February of 2023, and to a lesser extent, new development. The District has three active
residential developments during 2022-23 and added approximately 100 new customers as a result.
$0
$5
$10
$15
$20
$25
$30
$35
2019 2020 2021 2022 2023
Mi
l
l
i
o
n
s
Water Operating
Revenue versus Expenses
Revenue
Expenses
Water Operating expenses decreased 1.2% to $26.6 million for fiscal year 2022-23. The primary factors contributing
to this significant increase were a market median wage adjustment for positions found by an independent study to
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
20
be significantly below market median, energy costs, and inflationary pressure on the price of goods and services
overall.
The rising cost of energy has had a significant impact on water operations for the past three years. Although the
District has recently implemented two rate adjustments, Edison rate increases, combined with rising insurance costs
and fuel costs, have kept the District from being able to build on reserves. In addition to rate increases, Edison
redefined daily ‘peak’ hours. Peak hours and the high rates associated with them, were shifted away from the
period 1:00 p.m. to 5:00 p.m., hours during which demands on the electrical grid have fallen because many
customers are generating their own solar energy during those hours, to 4:00 p.m. to 9:00 p.m. when customers
returning home from work/school are using electrical appliances but cannot generate solar energy. The District was
able to adjust to the shift in peak hours during weekdays, but another revision that added peak hour pricing to
weekend days disrupted District operational strategies that avoided peak hour rates by filling all reservoirs during
the weekend.
The effects of power cost increases and other costs fluctuations on the various cost centers and programs are
outlined below:
• Source of Supply: power costs related to groundwater well production increased $834 thousand (46%) as
water production was shifted from the District’s Surface Water Treatment Plant to wells while new Granular
Activated Carbon treatment trains were installed at the treatment plant.
• Pumping: power costs related to boosting water to higher pressure zones increased $117 thousand (18%)
to $763 thousand due to continued changes in Edison rates and rate structures explained above.
• Treatment: these costs increased $167 thousand (16%) overall primarily due to a $125 thousand increase
in materials and supplies, as District staff replaced fittings and valves on Plant 134 membrane treatment
trains as these fittings were 15 years old. Staff also had to contract for the replacement of GAC filter media
at the District’s Plant 28, which led to a 54% increase in Contract Services costs for the treatment program
compared to prior year costs. Power and chemical costs decreased slightly due to the shift in water
production from the treatment plant to wells explained above.
• Transmission and Distribution: distribution system maintenance costs increased $748 thousand (21%) due
to increases to all the major budget line items for this program – salaries & benefits, contract services, and
materials and supplies. The costs were higher than projected as District crews responded to more than 200
main leaks, five of which involved significant water loss. Contracted paving services increased along with
the number of leaks repaired.
Wastewater Collection Operations
Wastewater Collections operating revenues consist of System Charges and Other Operating Revenue.
System Charge rates are set by the District to cover the cost of maintaining the District’s wastewater collection
system and to cover a portion of administrative and general expenses. A rate adjustment implemented in January
2023 was primarily responsible for an increase in System charge revenue to $5.6 million for 2022-23.
Other Operating Revenue includes inspections, plan checking, and other development related fees; and periodic
reimbursements from other public agencies or utilities for shared costs or participation in conservation programs.
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
21
In fiscal year 2022-23, Other Operating Revenue included significant service connection fees related to Additional
Dwelling Units (ADUs) built on parcels with existing residential units.
Wastewater Collection pipeline maintenance costs increased by 28% compared to the prior year. This change is
the result of increased salaries and benefits costs as the District filled a vacant position on the maintenance crew.
$0
$1
$2
$3
$4
$5
$6
$7
2019 2020 2021 2022 2023
Mi
l
l
i
o
n
s
Wastewater Collections Operating
Revenue versus Expenses
Revenue
Expenses
Water Reclamation Operations
Water Reclamation operating revenue consists primarily of Wastewater Treatment charges. Treatment Charge rates
have historically been established by the City of San Bernardino Water Department (City), which currently, and until
approximately February 2024, treats wastewater flows generated by District customers. In February, upon
completion of the SNRC, the District should have the capability to treat its own wastewater.
The graph below depicts the District’s revenue and expenses related to the treatment of wastewater. Through FY
2021 the District used the City rates to bill its customers and then remit payment to the City at the end of each
month. Under this relationship, treatment revenue collected was exactly equal to treatment fees paid to the City.
In May 2022, the District established and implemented its own rates and began hiring operators and covering
startup costs for commencement of operations at the SNRC. The District’s Wastewater Treatment rates were
adopted with three phases. Phases 1 and 2 were implemented in May 2022 and January 2023, respectively, with
phase 3 scheduled for implementation in January 2024. The District’s rate structure consists of fixed monthly
charges for all residential customers, and for non-residential customers, a combination of fixed and variable charges,
which are assessed based on water usage.
For the year ended June 2023, Water Reclamation revenue was $10.1 million, compared to $9.7 million in the
previous fiscal year. The increase was substantially due to the rate adjustment that became effective in January
2023.
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
22
$6
$7
$8
$9
$10
$11
2019 2020 2021 2022 2023
Mi
l
l
i
o
n
s
Water Reclamation Operating
Revenue versus Expenses
Revenue
Expenses
Water Reclamation is presented as a separate fund for the first time in 2022-23 and costs that are being incurred
have no prior year numbers for comparison purposes. Therefore, just a brief description of costs that were incurred
in the inaugural year follows.
Water Reclamation operating costs include continued monthly treatment fees paid to the City; these payments will
continue until the SNRC is operational and flows can be diverted away from the City’s treatment plant. Treatment
fees (included in Contract Services) were $8.5 million, compared to $9.0 million in the previous fiscal year; a 6%
decrease. Treatment fees include a significant component based on water usage, which as explained in previous
sections, was down significantly in 2022-23
Other treatment operating costs totaled $1.1 million and included operator labor and benefits, power costs, and
supplies. In addition, costs for maintenance of the plant, such as facilities labor and benefits, insurance, security,
and tools, totaled $0.7 million.
Shared Customer Account & Administrative Costs
Costs related to Customer Accounts are generated by the Customer Service and Meter Services departments. The
burden for funding these costs is allocated between the Water and Wastewater Collection funds at roughly a 70%-
30% split; the Water Reclamation fund does not currently share in these costs, and will not until the fund is more
established and revenues are able to cover costs sufficiently.
Customer account costs did increase 31% in 2022-23, primarily due to the opening of a second Customer Service
counter at the new SNRC campus in July 2022. The cost experiencing the most significant increases were salaries
and benefits, contract services, and postage. Salaries & benefits increased due to normal pay range step increases,
the creation of a second Lead position for the new office, and increased reliance on temporary labor to fill in for
vacations and illnesses. Contract Services increased because of duplicate services needed at the second site (e.g.
Armored car), and the ramping up of bill collection efforts when the moratorium on disconnections for non-payment
was lifted by the Governor. Increased delinquent notice delivery related to the collection efforts was also the reason
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
23
for an increase in postage. Administrative and general costs for the District decreased by 5.0% to $13.2 million.
The decrease is the net effect of several factors, the most significant of which are the following:
1. Salaries & Benefits decreased $2.4 million to $6.0 million, compared to $8.4 million incurred in the previous
year. This unlikely variance between years is the result of accounting entries to adjust pension and OPEB
liabilities to actuarially calculated balances. These adjustments had the effect of increasing Benefits costs
by $1.4 million in the previous year, and decreasing them by $1.0 million in the current year. If these
adjustments are ignored, salaries and benefits remained constant at about $7.0 million, with the normal
pressures for increases from raises and COLA adjustments that were offset by vacated positions that had
not been filled as of June 2023.
2. Insurance costs continued to climb, by 52.5% to $1.2 million in 2022-23. The insurance industry in
California continues to feel the effects of costly wildfires in 2019, including the District’s risk pool which
buys excess insurance on the open market.
3. Contract Services increased 45.8% to $3.8 million. The most significant items were incurred at the new
SNRC administrative campus, where security services, landscaping and other maintenance services,
software licensing and maintenance, and utilities added approximately $800 thousand to annual costs.
Non-Operating Activities
The District’s non-operating revenue of $432 thousand includes investment income of $352 thousand, a gain on
disposal of surplus vehicles of $30 thousand, and miscellaneous income of $50 thousand.
Investment income is earned on the District’s portfolio of US Treasury and Agency Bonds and deposits with the
Local Agency Investment Fund (LAIF). During 2022-23, the District’s investment earnings increased 50% compared
to the prior year, with yields on U.S. obligations exceeding 5% and the apportionment rate paid by LAIF more than
quadrupled from 0.75% to 3.15%. At year end, however, the District booked an unrealized loss on investments
due to fair value fluctuations, and the loss of $87 thousand (presented with non-operating expenses) reduces the
net income on investments to $265 thousand.
One additional item shown as non-operating expense is interest paid on Long-Term Debt of $869 thousand.
Capital Contributions
Contributions received during fiscal year 2022-23 included $1.9 million in developer capacity fees and $62 thousand
in operating cost reimbursement grants related to COVID-19.
Capacity fees were received for 113 Equivalent Dwelling Units (EDUs) throughout the fiscal year, with 36 of the
units being classified as commercial, and the remaining 77 units coming from two moderate developments of single-
family homes.
Grant funds received were $58 thousand FEMA funds for COVID-19 pandemic related expenses and safety protocols
put in place during 2021. The remaining $4 thousand is administrative cost reimbursements for the District’s
participation in the California Arrearage Payment Program (CAPP) in which the state paid delinquent customer
accounts for bills incurred during the pandemic.
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
24
East Valley Water District Changes in Net Position
(in millions)
2023 2022 2021
Water Sales 17.0$ 18.5$ 19.3$
System Charges 15.5 14.0 13.9
Treatment Charges 10.1 9.8 8.5
Other Operating Rev 1.2 0.8 0.5
Supply & Pumping (4.9) (4.3) (4.2)
Distribution / Collection (5.1) (4.2) (4.0)
Treatment (10.8) (10.1) (9.5)
Customer Accounts (2.2) (1.7) (1.6)
General & Administrative (13.2) (13.9) (10.7)
Depreciation (6.3) (6.4) (6.5)
Non-Operating Revenues 0.4 1.3 0.2
Interest Expense (0.9) (1.6) (2.6)
Income Before Contributions & Special Item 0.8 2.2 3.3
Developer Contributions 1.8 2.7 0.6
Grant Funds Contributed 0.1 0.1 0.3
Change in Net Position 2.7 5.0 4.2
Beginning Net Position, as Previously Reported 145.1 140.1 135.9
Ending Net Position 147.8$ 145.1 140.1
Components of Net Position
The District is required to present its net position in three categories: Net Investment in Capital Assets, Restricted,
and Unrestricted.
Net Investment in Capital Assets
The components comprising Net Investment in Capital Assets are presented in Note 7 of the accompanying financial
statements. The balance at June 30, 2023 is $112.9 million, a decrease of $4.2 million compared to June 30, 2022.
The decrease is the net result of the acquisition or construction of capital assets for $16.7 million, offset by a $14.6
million increase in outstanding debt (includes associated deferred inflows/outflows), and depreciation of $6.3
million.
Restricted
Restricted Net Position consists of unexpended development impact fees which may only be appropriated for a
project included in the District’s Capital Improvement Program. During fiscal year 2022-23 the District received $1.9
million in capacity fees while no restricted funds were used to fund current projects. A summary of the accumulation
and use of these funds is presented as Other Information in this document.
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
25
Unrestricted
Unrestricted Net Position is the balance after amounts to be classified as Net Investment in Capital Assets or
Restricted have been determined. Unrestricted Net Position increased $5.2 million to $24.1 million in fiscal year
2022-23.
Capital Assets
The District spent approximately $16.7 million for expansion or replacement of property, plant, and equipment
during the 2022-23 fiscal year. These amounts are reflected in Utility Plant, or as additions to Construction in
Progress, in the accompanying financial statements.
Placed in Service
During the 2022-23 fiscal year, District staff, consultants, and contractors completed work on the following:
• Rehabilitated 2 million gallon storage tank at Plant 108;
• Installed emergency generator (grant funded) at Plant 101;
• Replaced and upsized approximately 1,800 feet of water main in Elmwood Road and Pleasant Hill Drive
with District crews; and
• Completed renovations to Boardroom and Customer Service counters to enhance security and functionality.
Utility Plant in Service – June 30th
(in millions)
Department 2023 2022
Water
Source of Supply 19.8$ 19.5$
Pumping 15.2 15.2
Transmission & Distribution 102.2 100.9
Treatment 29.3 29.2
Wastewater
Collection Lines 27.9 27.8
General
Plant 32.6 31.2
Total 227.0$ 223.8$
Construction in Progress (CIP)
Construction in Progress increased $12.7 million to $196.7 million (see note 4) between June 30, 2022 and June
30, 2023. With approximately 45 projects in progress, additions to CIP totaled $15.6 million, while $2.9 million was
capitalized and transferred to Utility Plant in Service, or expenses.
Of the $196.7 million balance in Construction in Progress at June 30, 2023, 96% is related to a single project, the
Sterling Natural Resource Center.
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
26
The SNRC is a water reclamation plant capable of converting six million gallons per day (mgd) of wastewater into
recycled water that will be recharged into the regional groundwater basin. Future phases will increase capacity of
the plant to 10 mgd.
Other significant work in progress includes upgrades to treatment processes at the District Surface Water Treatment
Plant (134), and drilling of two monitoring wells to monitor effects of recharging recycled water in the groundwater
basin.
Future Capital Improvements - Water
The District’s ability to meet water quality requirements, promote water conservation, and increase efficiencies in
conducting District business are the driving forces by which District management develops long-term capital plans.
To meet these objectives, the District’s 5-year Capital Improvement Plan includes the following projects:
• Rehabilitation of District water storage tanks;
• Replacement of aging water distribution pipelines that require frequent repair and are suspected of causing
system water losses;
• Seismic retrofits for multiple water tanks / reservoirs to help ensure structural integrity of the tank during
a major earthquake; and
• Partner with developers to increase the capacity of new storage tanks they plan to build to serve their
project.
The District has been awarded 10% match funding under the State’s Prepare California Match Program for a $6.8
million project to complete seismic retrofits on several water storage tanks. A District application for FEMA 2022
Building Resilient Infrastructure and Communities (BRIC) grant funds to cover 90% of the project is under review
and should be finalized early in 2023.
The District has also been awarded Phase 1 FEMA funding of over $1.1 million for design of a significant water
main replacement project. Once design is complete, the District will work to finalize Phase 2 funding to cover up to
$40 million in replacement of pipelines which qualify for hazard mitigation assistance. The District is also exploring
the feasibility of building a new surface water treatment plant in the District’s east end, closest to the source of
surface water and to the largest areas of undeveloped land in the District’s service area.
Future Capital Improvements - Wastewater
The District maintains a list of recommended wastewater main replacements / rehabilitations based on assessments
of pipeline condition noted during video logging of the collection system. Pipelines assessed at the highest risk of
structural failure are prioritized on the District’s 5-year Capital Improvement Plan (CIP).
The District will also update its Wastewater Collection System Master Plan during fiscal year 2024-25 to identify
undersized main pipelines that are susceptible to surcharging during heavy rains. Undersized pipelines can impede
new development and will be included in discussions with developers as necessary. Pipelines identified in the
District’s Wastewater Collection System Master Plan will be built into models developed for an update to the District’s
capacity fees.
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
27
Long Term Debt / Credit
The District’s long-term debt consists of Revenue Bonds, loans from the California Department of Water Resources
(DWR) State Revolving Fund, a capital lease purchase with U.S. Bank, and a loan from the San Bernardino Valley
Municipal Water District (SBVMWD). Outstanding balances as of June 30, 2023 were as follows:
2020A Refunding Bonds 15,050,000$
2020B Refunding Bonds 13,060,000
SBVMWD Loan 1,275,000
AVAD Construction 50,716
EFAD Construction 260,323
Plant 134 Construction 5,134,773
SNRC Construction 155,723,918
U.S. Bank Lease Purchase 444,375
Total 190,999,105$
The funding agreement with the State Water Resources Control Board for the SNRC construction consists of a
$150.3 million loan at 1.8% and a $6.7 million grant, and was finalized on November 21, 2019. In May of 2023 the
District was approved for an increase in the loan to $168.3 million for three purposes, 1) finance a large emergency
storage basin for off-spec water in the event of an SNRC emergency shutdown, 2) upgrade boosters to move
recycled water farther to a revised location for recharge, and 3) to fund a gap between the amount of contracts
signed to build digesters at the SNRC, and the existing loan funding for those digesters.
Debt service of approximately $7.5 million and plant operating expenses will be paid with $8.7 million currently
paid to the City of San Bernardino Water Department for wastewater treatment. Additional revenue streams will
include Local Resource Investment Program payments received from the San Bernardino Valley Municipal Water
Department for the recharge of recycled water produced by the SNRC, tipping fees from waste haulers who dispose
of liquid waste at the District digesters, and energy cost avoidance through use of power produced by the digesters.
The loan balance as of June 30, 2023 is $155.7 million; loan payments will begin one year after the Notice of
Completion is filed for the SNRC.
All scheduled debt payments for fiscal year 2022-23 were paid timely. See Note 5 to the accompanying financial
statement notes for further discussion about Long-Term Debt.
EAST VALLEY WATER DISTRICT
Management’s Discussion and Analysis
Year Ended June 30, 2023
28
$0
$50
$100
$150
$200
$250
2019 2020 2021 2022 2023
Mi
l
l
i
o
n
s
Outstanding Long-Term Debt June 30th
2020B Bonds
2020A Bonds
SBVMWD Loan
US Bank Loan
SRF Loans-Other
SRF Loan-SNRC
Standard & Poor’s and Fitch rated the District’s 2020 Series A and B Revenue Bonds at AA- at the time of issuance.
Fitch affirmed this rating after a review of the District’s financial plans in June 2023. Dun & Bradstreet (D&B), based
on audited financial statements and creditor input, also rated the District. The rating given by D&B is currently 5A1
accompanied by a financial condition assessment of ‘strong’, which is no change from previous years.
Rate Increases
On May 12, 2021 the District adopted rate adjustments for water and wastewater collection activities, and adopted
inaugural rates for the District’s water reclamation activities which were implemented in May of 2022 to help pay
startup costs being incurred prior to commencement of operations of the Sterling Natural Resource Center.
Additional rate adjustments for all water and wastewater services are scheduled to become effective on January 1,
2024.
Additional information about the District’s water and wastewater rates can be found on the District’s website at
www.eastvalley.org.
Contacting the District’s Financial Management
This financial report is designed to give our customers / ratepayers, creditors, and investors a general overview of
the District’s finances, and to demonstrate the District’s accountability for money it receives, and stewardship over
facilities it maintains.
If you have questions about this report, or need additional information, contact the District’s Finance Department
at 31111 Greenspot Road, Highland, California 92346, or call (909) 381-6463.
29
30
EAST VALLEY WATER DISTRICT
Statement of Net Position
June 30, 2023
The accompanying notes are an integral part of this statement.
31
For Comparative
Purposes Only
2023 2022
ASSETS
Current Assets:
Cash and Cash Equivalents 10,465,911$ 11,313,557$
Investments 5,329,245 4,574,471
Accounts Receivable, Net 5,940,839 6,974,934
Interest Receivable 73,545 18,461
Other Receivables 1,847,810 1,994,056
Due from Other Governments 20,552,300 10,306,002
Inventory 974,820 944,539
Prepaid Expenses 256,800 270,497
Total Current Assets 45,441,270 36,396,517
Non-Current Assets:
Restricted Cash and Cash Equivalents 12,357,894 10,960,683
Assessments Receivable 263,478 285,745
Capital Assets not being Depreciated 203,751,889 190,577,346
Capital Assets, Net 115,951,753 118,693,660
Total Non-Current Assets 332,325,014 320,517,434
Total Assets 377,766,284 356,913,951
DEFERRED OUTFLOWS OF RESOURCES
Deferred Charge on Refunding 854,647 896,852
Deferred Outflows - Pensions 5,317,071 2,024,887
Deferred Outflows - OPEB 1,184,326 794,163
Total Deferred Outflows Of Resources 7,356,044 3,715,902
Total Assets and Deferred Outflows
of Resources 385,122,328$ 360,629,853$
(Continued)
EAST VALLEY WATER DISTRICT
Statement of Net Position - Continued
June 30, 2023
The accompanying notes are an integral part of this statement.
32
For Comparative
Purposes Only
2023 2022
L IABILITIES
Current Liabilities:
Accounts Payable and Accrued Expenses 8,423,138$ 5,283,932$
Accrued Payroll and Benefits 825,377 772,778
Customer Service Deposits 1,403,962 1,390,220
Construction Advances and Retentions 12,142,565 10,188,813
Accrued Interest Payable 263,778 263,507
Current Portion of Compensated Absences 652,177 604,122
Current Portion of Long-Term Debt 2,555,654 2,499,787
Due to Other Governments 135,523 -
Total Current Liabilities 26,402,174 21,003,159
Non-Current Liabilities:
Compensated Absences, Less Current Portion 775,590 683,507
Net Pension Liability 13,855,136 6,657,689
Net OPEB Liability 1,986,360 1,861,875
Long-Term Debt, Less Current Portion 191,256,816 177,740,054
Total Non-Current Liabilities 207,873,902 186,943,125
Total Liabilities 234,276,076 207,946,284
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - Refunding 1,128,796 1,181,143
Deferred Inflows - Pensions 1,600,501 6,115,141
Deferred Inflows - OPEB 326,072 288,464
Total Deferred Inflows Of Resources 3,055,369 7,584,748
Total Liabilities and Deferred
Inflows Of Resources 237,331,445 215,531,032
NET POSITION
Net Investment in Capital Assets 112,909,956 117,079,071
Restricted for:
Future Capital Expansion Projects 10,761,677 9,076,014
Unrestricted 24,119,250 18,943,736
Total Net Position 147,790,883$ 145,098,821$
EAST VALLEY WATER DISTRICT
Statement of Revenues, Expenses, and Changes in Net Position
Year Ended June 30, 2023
The accompanying notes are an integral part of this statement.
33
For Comparative
Purposes Only
2023 2022
OPERATING REVENUES
Water Sales 17,004,576$ 18,472,876$
Wastewater Treatment Charges 10,108,850 9,764,357
System Charges 15,483,115 14,020,823
Other Charges 1,213,471 835,559
Total Operating Revenues 43,810,012 43,093,615
OPERATING EXPENSES
Water Department:
Source of Supply 3,890,634 3,515,262
Pumping 1,003,038 756,843
Treatment 1,212,646 1,045,730
Transmission and Distribution 4,311,606 3,563,328
Customer Accounts 1,653,739 1,225,403
Total Water Department 12,071,663 10,106,566
Wastewater Department:
Wastewater Collection 752,489 587,128
Customer Accounts 604,006 494,505
Total Wastewater Department 1,356,495 1,081,633
Reclamation Department:
Customer Accounts 9,601,461 9,084,061
Total Reclamation Department 9,601,461 9,084,061
Administrative and General 13,221,140 13,927,491
Operating Expenses Before Depreciation 36,250,759 34,199,751
Depreciation 6,264,377 6,378,590
Total Operating Expenses 42,515,136 40,578,341
Operating Income 1,294,876$ 2,515,274$
(Continued)
EAST VALLEY WATER DISTRICT
Statement of Revenues, Expenses, and Changes in Net Position - Continued
Year Ended June 30, 2023
The accompanying notes are an integral part of this statement.
34
For Comparative
Purposes Only
2023 2022
NON-OPERATING REVENUES (EXPENSES)
Investment Income 352,273$ 165,989$
Gain on Disposal 30,134 1,042,562
Other Income 49,404 33,706
Interest Expense (869,397) (1,295,223)
Unrealized Investment Losses (87,280) (303,474)
Total Non-Operating Revenues (Expenses)(524,866) (356,440)
Income Before Contributions 770,010 2,158,834
CONTRIBUTIONS
Capacity Charges 1,860,020 2,722,948
Operating Grants 62,032 103,577
Total Contributions 1,922,052 2,826,525
CHA NGE IN NET POSITION 2,692,062 4,985,359
TOTA L NET POSITION, BEGINNING 145,098,821 140,113,462
TOTA L NET POSITION, ENDING 147,790,883$ 145,098,821$
EAST VALLEY WATER DISTRICT
Statement of Cash Flows
Year Ended June 30, 2023
The accompanying notes are an integral part of this statement.
35
For Comparative
Purposes Only
2023 2022
C ASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers 45,004,610$ 42,383,540$
Cash Payments for Employees Services (12,286,780) (12,167,869)
Cash Payments to Suppliers (21,332,407) (22,435,948)
Cash to/(from) Other Sources 49,404 (1,186,152)
Net Cash Provided by Operating Activities 11,434,827 6,593,571
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Reimbursements Received 3,103,376 8,287,456
Grant Funds Received 62,032 -
Proceeds from Sale of Capital Assets 40,093 3,368,677
Developer Fees Received 1,860,020 2,826,525
Assessments Received 93,827 23,081
Proceeds/Draws from SRF Loan 2,705,185 13,221,385
Principal Paid on Capital Debt (2,336,691) (2,290,011)
Interest Paid on Capital Debt (1,024,807) (1,527,660)
Acquisition of Capital Assets (14,771,878) (25,897,709)
Net Cash Used for Capital and
Related Financing Activites (10,268,843) (1,988,256)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received from Investments 224,214 62,700
Acquisition of Investments (1,139,837) (3,456,732)
Proceeds from Sale of Investments 299,203 2,357,673
Net Cash Provided (Used) by
Investing Activities (616,420) (1,036,359)
Net Increase (Decrease) in Cash
and Cash Equivalents 549,564 3,568,956
Cash and Equivalents, Beginning of Year 22,274,241 18,705,285
Cash and Equivalents, End of Year 22,823,805$ 22,274,241$
RECONCILIATION TO STATEMENT OF NET POSITION
Cash and Cash Equivalents 10,465,911$ 11,313,557$
Restricted Cash and Cash Equivalents 12,357,894 10,960,683
Total Cash and Cash Equivalents 22,823,805$ 22,274,240$
(Continued)
EAST VALLEY WATER DISTRICT
Statement of Cash Flows - Continued
Year Ended June 30, 2023
The accompanying notes are an integral part of this statement.
36
For Comparative
Purposes Only
2023 2022
R econciliation of Operating Income to Net
Cash Provided by Operating Activities
Operating Income 1,294,874$ 2,515,274$
Adjustments to Reconcile Operating
Income to Net Cash Provided by
Operating Activities:
Depreciation 6,264,377 6,378,590
Miscellaneous Income/(Expense)49,404 126,699
CIP Projects Expensed 18,656 714,343
Change in Assets and Liabilities:
(Increase) Decrease in Accounts Receivable 1,412,339 (938,233)
(Increase) Decrease in Inventory (30,281) (440,925)
(Increase) Decrease in Prepaids 13,697 116,907
(Increase) in Deferred Outflows of Resources - Pensions (3,682,347) 851,405
Increase (Decrease) in Accounts Payable 3,274,023 (2,053,069)
Increase (Decrease) in Accrued Salaries
and Benefits 52,612 88,171
Increase (Decrease) in Compensated Absences 140,139 81,086
Increase (Decrease) in Net Pension Liability 7,197,447 (5,655,605)
Increase in Net OPEB Liability 124,485 (179,102)
Decrease in Deferred Inflows of Resources (4,477,032) 6,072,725
Increase (Decrease) in Customer Deposits (231,483) (1,312,853)
Increase (Decrease) in Developer Deposits 13,917 228,158
Total Cash Provided by Operating Activities 11,434,827$ 6,593,571$
NON-CA SH INVESTING, CA PITA L, A ND NON-CA PITA L
FINANCING ACTIVITIES:
Fair Value Adjustments to Investments 300,746$ 300,746$
Receivable Offset by Debt 13,349,674$ -$
1,953,751$ 2,079,355$
Capital Assets Acquired by Assuming
Liabilities, Including Retainage Payable
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
37
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Reporting Entity
The East Valley Water District is a special district that was formed in 1954, as a result of an election by local
residents who desired water service by a public water agency. Later, as the population increased, a modern
wastewater system was needed to replace the septic tanks used at the time. Citizens voted to give the District
responsibility for that service. The District encompasses an area of approximately 30.1 square miles and
provides water and wastewater service to the City of Highland, parts of the City of San Bernardino, and
unincorporated parts of the County of San Bernardino, California.
The East Valley Water District Financing Authority (Authority), and the North Fork Water Company (Company)
are component units of the East Valley Water District. A component unit is an entity which is financially
accountable to the primary government, either because the primary government appoints a voting majority
of the component unit's Board, or because the component unit will provide a financial benefit or impose a
financial burden on the primary government. The Authority, and Company are blended component units. Only
North Fork Water Company prepares separate financial statements.
The Authority was created in August 2010 by a joint exercise of powers agreement for the purpose of financing
public capital improvements. It is governed by a Board of Directors comprised of the District's Board of
Directors. The Authority issued debt in October 2010 which is secured solely from installment payments under
an installment purchase agreement entered into by the District and the Authority.
The Company was established in February 1885 to deliver water, taken from the Santa Ana River to its
property owner /shareholders. The Company is governed by a Board of Directors comprised of, and elected
by, Company shareholders. The District has purchased shares of Company stock as they become available to
secure rights to the Santa Ana River water and have it delivered to the District's surface water treatment
plant. At June 30, 2022, the District owned 7,146.99 of 7,156 outstanding Company shares.
Due to the number of Company shares owned, the District is able to appoint a majority of the Company’s
Governing Board and is therefore financially accountable for the Company. In addition, management and
staff of the District have complete responsibility for the operations of the Company. As a result, the
Company's financial statements have been included in the accompanying financial statements as a blended
component unit. Copies of the Company's financial statements may be obtained from the District’s Finance
Department at 31111 Greenspot Road, Highland, California 92346.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
38
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
The following condensed combining schedule shows how the District, and its component units are blended in
the accompanying financial statements:
Table 1-1
District NFWC Eliminations Total
Statement of Net Position
Current Assets 45,429,065$ 12,205$ -$ 45,441,270$
Capital Assets 321,611,270 158,603 (2,066,231) 319,703,642
Other Assets 9,959,296 2,662,076 - 12,621,372
Deferred Outflows 7,356,044 - 7,356,044
Total Assets & Deferred Outflows 384,355,675 2,832,884 (2,066,231) 385,122,328
Current Liabilities 26,396,607 5,567 - 26,402,174
Long-Term Liabilities 207,873,902 - - 207,873,902
Deferred Inflows 3,055,369 - - 3,055,369
Total Liabilities & Deferred Inflows 237,325,878 5,567 - 237,331,445
Net Investment in Capital Assets 112,226,565 2,749,622 (2,066,231) 112,909,956
Restricted Net Position 10,683,982 77,695 - 10,761,677
Unrestricted Net Position 24,119,250 - 24,119,250
Total Net Position 147,029,797$ 2,827,317$ (2,066,231)$ 147,790,883$
Statement of Changes in Net Position
Sales and Services 42,596,541$ -$ -$ 42,596,541$
Other Operating Revenue 1,213,471 - 1,213,471
Operating Expenses 36,138,327 112,432 - 36,250,759
Depreciation 6,208,540 55,837 - 6,264,377
Operating Income 1,463,145 (168,269) - 1,294,876
Net Non-Operating Revenue
(Expenses)(596,426) 71,560 - (524,866)
Capital Contributions 1,922,052 - - 1,922,052
Special Items - - - -
Change in Net Position 2,788,771 (96,709) - 2,692,062
Beginning Net Position 144,241,026 2,924,026 (2,066,231) 145,098,821
Ending Net Position 147,029,797$ 2,827,317$ (2,066,231)$ 147,790,883$
Net Cash from Operating Activities 11,581,310$ (146,483)$ -$ 11,434,827$
Net Cash from Capital and Related
Financing Activities (10,340,403) 71,560 - (10,268,843)
Net Cash from Investing Activities (616,420) - (616,420)
Beginning Cash and Equivalents 22,042,173 232,068 - 22,274,241
Ending Cash & Equivalents 22,666,660$ 157,145$ -$ 22,823,805$
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
39
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
B) Measurement Focus, Basis of Accounting and Financial Statement Presentation
The accounting and financial reporting treatment is determined by the applicable measurement focus and
basis of accounting. Measurement focus indicates the type of resources being measured such as current
financial resources or economic resources. The basis of accounting indicates the timing of transactions or
events for recognition in the financial statements.
The District uses the economic resources measurement focus and the accrual basis of accounting.
Accordingly, revenues are recognized when they are earned, and expenses are recorded when the liability
is incurred.
C) Comparative Data
Prior year data has been included where practical for comparison purposes only. The prior year data does not
represent a complete presentation in accordance with accounting principles generally accepted in the United
States of America.
D) Inventory Valuation
Inventories are valued at cost using the average-cost method.
E) Capitalization and Depreciation
Capital assets purchased or constructed by the District are recorded at cost. Donated capital assets are
recorded at acquisition value as of the date received. The District has a capitalization threshold of $5,000.
Depreciation is computed using the straight-line method over the estimated useful lives of the various assets.
Water canals, water, and wastewater lines are depreciated over 25 to 50 years; office equipment and vehicles
are depreciated over 5 years.
Water stock and rights contributed to the District are recorded at the same value the District is currently
paying for the purchase of similar stock.
F) Restricted Assets
Certain assets of the District are restricted in use by ordinance or debt covenant and accordingly are shown
as restricted assets on the accompanying statement of net position. Unexpended Bond proceeds are set aside
for capital improvements, District deposits into Bond trustee accounts are to be used for debt service, and
utility deposits must be returned to the customers at their request after their account has been paid timely
for 12 consecutive months, or when their account is closed.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
40
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
G) Cash and Cash Equivalents
For the purposes of the statement of cash flows, cash and cash equivalents have been defined as demand
deposits and highly liquid investments purchased with an original maturity of 3 months or less. The District
invests funds with the Local Agency Investment Fund (LAIF) and Money Market Mutual Funds. Due to the
high liquidity of these investments, these funds are classified as cash equivalents.
H) Investments
The District has adopted the provisions of GASB Statement No. 72, Fair Value Measurement and Application.
The objective of this Statement is to enhance comparability of financial statements among governments by
measurement of certain assets and liabilities at their fair value using a consistent and more detailed definition
of fair value and accepted valuation techniques. The definition of fair value is the price that would be received
to sell and asset or paid to transfer a liability in an orderly transaction between market participants at the
measurement date. This Statement establishes a hierarchy of inputs to valuation techniques used to measure
fair value.
I) Deferred Outflows/Inflows of Resources
In addition to assets, the statement of financial position includes a separate section for deferred outflows
of resources. This separate financial statement element, deferred outflows of resources, represents a
consumption of net assets that applies to future periods and so will not be recognized as an outflow of
resources (expense/expenditure) until then. The District has three items which qualify for reporting in this
category: Deferred Outflows Charge on Refunding, Deferred Outflows Related to Pensions, and Deferred
Outflows Related to OPEB.
In addition to liabilities, the statement of financial position includes a separate section for deferred inflows
of resources. This separate financial statement element, deferred inflows of resources, represents an
acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of
resources (revenue) until that time. The District has three items which qualify for reporting in this category:
Deferred Inflows related to Pensions, Deferred Inflows related to OPEB, and Deferred Inflows related to
Bond Refinancing.
J) Compensated Absences
The District has a policy whereby an employee can accumulate unused sick leave and vacation. Sick leave is
to be used for extended periods of sickness; however, upon termination or retirement, a portion will be paid
as additional benefits to the employee. At retirement or termination, employees who have accumulated over
ten years of service will be paid between 50 to 70% of their unused sick leave (based upon their balance of
unused sick leave) at their regular payroll rates in effect at the date of termination. Also, employees can cash
out up to 300 hours of unused sick time, per calendar year, provided that a minimum of 160 hours is retained
after said cash-out. The District has provided for these future costs by accruing a range of the earned and
unused sick leave and 100% of the earned and unused vacation.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
41
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
K) Classification of Revenue
As an enterprise (proprietary) fund, the District classifies its revenues into three classifications: operating
revenue, non-operating revenue, and contributions.
Operating revenues are defined as revenues realized by the District in exchange for providing its primary
services of water distribution and wastewater collection to its customers. Non-operating revenues are those
derived from the investment of cash reserves and from the disposal of excess property, and include those
resources received from entities other than customers, such as governmental agencies and developers, for
purposes not related to capital improvement. Donated plant and cash received for capital improvement
without the requirement that the District give resources in exchange are recorded as contributions.
L) Use of Restricted Resources
The District uses restricted resources, prior to using unrestricted resources, to pay expenses meeting the
criteria imposed on the use of restricted resources by a third party.
M) Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the
United States of America requires management to make estimates and assumptions that affect certain
reported amounts and disclosures. Accordingly, actual results could differ from those estimates.
N) Pension
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of
resources related to pensions, and pension expense, information about the fiduciary net position of the Plan
and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis.
For this purpose, benefit payments (including refunds of employee contributions) are recognized when
currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
GASB 68 requires that the reported results must pertain to liability and asset information within certain defined
timeframes. For this report, the following timeframes are used.
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Measurement Period July 1, 2021 to June 30, 2022
O) Postemployment Benefits Other Than Pensions (OPEB)
For purposes of measuring the District’s OPEB liability related to the California Employer’s Retirement
Benefits Trust (CERBT), deferred outflows of resources and deferred inflows of resources related to OPEB,
and OPEB expense, information about the fiduciary net position of the CERBT and additions to/deductions
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
42
1) REPORTING ENTITY AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES - Continued
from the CERBT fiduciary net position have been determined on the same basis as they are reported by
the CERBT. For this purpose, the CERBT recognizes benefit payments when due and payable in accordance
with the benefit terms. Investments are reported at fair value, except for money market investments and
participating interest earning investment contracts that have a maturity at the time of purchase of one year
or less, which are reported at cost.
P) Future Accounting Pronouncements
The applicable GASB Statements listed below will be implemented in future financial statements:
Table 1-2
GASB Statement Description Effective Date
Statement No. 99 Omnibus 2022
Objectives of this Statement are to enhance comparability
in accounting and financial reporting and to improve the
consistency of authoritative literature by addressing (1)
practice issues that have been identified during
implementation and application of certain GASB Statements
and (2) accounting and financial reporting for financial
guarantees. The statement is effective for reporting
periods beginning after June 15, 2023.
Statement No. 100
(an amendment of
GASB Statement No.
62)
Accounting
Changes and
Error
Corrections
Prescribes the accounting and financial reporting for (1)
each type of accounting change and (2) error corrections.
This Statement requires disclosure in notes to financial
statements of descriptive information about accounting
changes and error corrections. The statement is effective
for fiscal years beginning after June 15, 2023.
Statement No. 101 Compensated
Absences
Updates the recognition and measurement guidance for
compensated absences by aligning the recognition and
measurement guidance under a unified model and by
amending certain previously required disclosures. The
statement is effective for fiscal years beginning after
December 15, 2023.
Cash and Investments as of June 30, 2023 are classified in the accompanying financial statements as follows:
Table 2-1
Cash and Cash Equivalents 10,465,911$
Restricted Cash and Cash Equivalents 12,357,894
Investments 5,329,245
Total 28,153,050$
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
43
2) CASH AND INVESTMENTS
Cash and investments as of June 30, 2023 consist of the following:
Table 2-2
Cash on Hand 9,000$
Deposits with Financial Institutions 8,781,290
Money Market Accounts with Financial Institutions 311,360
Investments with Local Agency Investment Fund 13,722,155
Investment in Debt Securities 5,329,245
Total 28,153,050$
Investments Authorized by the California Government Code and the District’s Investment Policy
The table below identifies the investment types that are authorized by the District's investment policy and in
accordance with Section 52601 of the California Government Code. The table also identifies certain provisions
of the District's investment policy that address interest rate risk and concentration of credit risk.
Table 2-3
Authorized Investment Type
Maximum
Maturity
Authorized
Limit
Required
Rating
Municipal Securities including EVWD Issues 5 years No ne None
U.S. Treasury Bills, Notes, or Bonds 5 years None None
State Registered Warrants, Notes, or Bonds 5 years None None
Notes and Bonds of other Local California Agencies 5 years None None
U.S. Agencies 5 years None None
Placement Service Deposits 5 years 30%None
Money Market Mutual Funds and Mutual Funds 5 years 15%2 - AAA
Collateralized Bank Deposits 5 years None None
Commercial Papers 270 days 5%A
Medium Term Notes 5 years 30%AA
Local Government Investment Pools N/A 25%AA
Local Agency Investment Fund (LAIF)N/A None None
At June 30, 2023, the District had no investments in repurchase agreements and did not utilize this investment
media during the reporting year. As a matter of investment policy, the District does not borrow funds with reverse
repurchase agreements.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
44
2) CASH AND INVESTMENTS - Continued
Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an
investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to
changes in market interest rates. One of the ways that the District minimizes its exposure to this type of risk is by
investing in investments with laddered maturity dates.
As of June 30, 2023, the District had the following investments and maturities:
Table 2-4
Investment Type Fair Value
Average
Maturity
Freddie Mac 91,310$ 2.14 years
Federal Home Loan Bank 2,983,235 1.74 years
Federal Farm Credit Bank 180,696 3.40 years
US Treasury 1,783,067 1.73 years
Tenn Valley Authority 290,937 1.21 years
LAIF 13,722,155 N/A
Money Market Mutual Funds 311,360 N/A
19,362,760$
Disclosures Relating to Credit Risk
Generally, credit risk is the risk that the issuer of an investment will not fulfill its obligation to the holder of the
investment. This is measured by the assignment of a rating by a nationally recognized statistical rating
organization. Presented below is the minimum rating required by (where applicable) the California Government
Code or the District’s investment policy, and the actual rating as of year-end for each investment type.
Table 2-5
Investment Type Fair Value
Minimum
Legal
Rating
Exempt
From
Disclosure
Rating at
Year End
AAA Not Rated
Freddie Mac 91,310$ N/A -$ 91,310$ -$
Federal Home Loan Bank 2,983,235 N/A - 2,983,235 -
Federal Farm Credit Bank 180,696 - 180,696 -
US Treasury 1,783,067 N/A 1,783,067 - -
Tenn Valley Authority 290,937 N/A - 290,937 -
LAIF 13,722,155 N/A - - 13,722,155
Money Market Mutual Funds 311,360 N/A - 311,360 -
19,362,760$ 1,783,067$ 3,857,538$ 13,722,155$
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
45
2) CASH AND INVESTMENTS - Continued
Fair Value Measurements
The District categorizes its fair value measurements within the fair value hierarchy established by generally
accepted accounting principles. These principles recognize a three-tiered fair value hierarchy, as follows:
• Level 1: Investments reflect prices quoted in active markets;
• Level 2: Investments reflect prices that are based on a similar observable asset either directly or indirectly,
which may include inputs in markets that are not considered to be active; and
• Level 3: Investments reflect prices based upon unobservable sources.
Valuation Technique: Level 2 Investments use the Market Approach which uses prices generated for identical or
similar assets or liabilities.
The District has the following recurring fair value measurements as of June 30, 2023:
Table 2-6
Quoted
Prices in
Active
Markets for
Identical
Assets
Significant
Other
Observable
Inputs
Significant
Unobservable
Inputs
Investments by Fair Value Level (Level 1) (Level 2) (Level 3)Total
Debt Securities
Freddie Mac 91,310$ -$ -$ 91,310$
Federal Home Loan Bank 2,983,235 - - 2,983,235
Federal Farm Credit Bank 180,696 - - 180,696
US Treasury 1,783,067 - - 1,783,067
Tenn Valley Authority 290,937 - - 290,937
Total Investments Measured at Fair Value 5,329,245$ -$ -$ 5,329,245$
Investments Measured at Amortized Cost
LAIF 13,722,155
Money Market Mutual Funds 311,360
Total Investments 19,362,760$
Fair Value Measurements Using
Disclosure Related to Concentration of Credit Risk
The District's policy places no limits on amounts invested in any given issuer beyond that stipulated by the
California Government Code. At June 30, 2023, there were no investments (other than external pools, U.S.
Government Securities and Money Market Mutual Funds) that exceeded 5% of the District's total investments.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
46
2) CASH AND INVESTMENTS - Continued
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a
government will not be able to recover its deposits or will not be able to recover collateral securities that are in
the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the
failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the
value of its investment or collateral securities that are in the possession of another party. The California
Government Code requires California banks and savings and loan associations to secure deposits by pledging
government securities as collateral. Such collateralization of public funds is accomplished by pooling. As such,
collateralized securities are held by the pledging financial institution's agent on behalf of the District. The fair value
of the pledged securities must equal at least 110% of Districts deposits. California law also allows financial
institutions to secure deposits by pledging first trust deed mortgage notes having a value of 150% of the secured
public deposits. The District may waive collateral requirements for deposits which are fully insured by Federal
depository insurance.
As of June 30, 2023, the District had $7,931,933 deposited with financial institutions that were in excess of federal
depository insurance limits. The federal deposit insurance limit is $250,000.
Investment in State Investment Pool
The management of the State of California Pooled Money Investment Account (generally referred to as LAIF) has
reported to its participating agencies that, as of June 30, 2023, the carrying amount (at amortized cost) of the
pool was $179,160,181,982 and the estimated fair value of the pool was $176,442,053,163. The District's
proportionate share of the fair value (as determined by LAIF) as of June 30, 2022, was $13,722,155. Included in
LAIF's investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-
backed securities, loans to certain State funds, and floating rate securities issued by federal agencies, government-
sponsored enterprises, and corporations. Currently LAIF does not have an investment rating. LAIF has a minimum
$5,000 transaction amount in increments of $1,000 with a maximum of 15 transactions (combination of deposits
and withdrawals) per month. LAIF requires a one-day prior notice for deposits and withdrawals of $10 million or
more.
3) RESTRICTED CASH AND CASH EQUIVALENTS
Restricted cash and cash equivalents at June 30, 2023 are restricted as follows:
Table 3-1
Held for Debt Service 279,428$
Capacity Fees from Developers 10,408,760
Customer Deposits 1,403,059
Construction Advances 109,500
North Fork Water Company 157,147
Total 12,357,894$
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
47
4) CAPITAL ASSETS
A summary of changes in capital assets for the year ended June 30, 2023 is as follows:
Table 4-1
Beginning of End of
Year Additions Deletions Adjustments Year
Water Fund
Non-Depreciable Assets
Land and Easements 3,148,311$ 503,385$ -$ -$ 3,651,696$
Water Rights 732,835 - - - 732,835
Construction in Progress 13,134,060 5,734,649 (2,546,191) - 16,322,518
Total Non-Depreciable Assets 17,015,206 6,238,034 (2,546,191) - 20,707,049
Depreciable Assets
Source of Supply 19,485,560 328,669 - - 19,814,229
Pumping Plant 15,186,844 93,653 (34,716) - 15,245,781
Treatment Plant 29,227,351 121,422 - - 29,348,773
Transmission and Distribution Plant 100,916,558 1,282,439 - - 102,198,997
General Plant 21,207,565 1,504,970 (150,627) - 22,561,908
Total Depreciable Assets 186,023,878 3,331,153 (185,343) - 189,169,688
Accumulated Depreciation
Source of Supply (9,105,956) (664,715) - - (9,770,671)
Pumping Plant (8,041,575) (487,631) 34,716 - (8,494,490)
Treatment Plant (13,835,822) (649,948) - - (14,485,770)
Transmission and Distribution Plant (45,246,131) (2,520,713) - - (47,766,844)
General Plant (8,745,386) (1,102,449) 150,627 - (9,697,208)
Total Accumulated Depreciation (84,974,870) (5,425,456) 185,343 - (90,214,983)
Water Fund Capital Assets, Net 118,064,214 4,143,731 (2,546,191) - 119,661,754
Wastewater Fund
Non-Depreciable Assets
Land and Easements 2,698,706 - - - 2,698,706
Construction in Progress 13,954,185 859,076 - - 14,813,261
Total Non-Depreciable Assets 16,652,891 859,076 - - 17,511,967
Depreciable Assets
Wastewater Collection Plant 27,841,682 36,452 (5,220) - 27,872,914
General Plant 9,948,793 164,824 (159,871) - 9,953,746
Total Depreciable Assets 37,790,475 201,276 (165,091) - 37,826,660
Accumulated Depreciation
Wastewater Collection Plant (15,973,236) (460,352) 5,220 - (16,428,368)
General Plant (4,172,587) (378,569) 149,912 - (4,401,244)
Total Accumulated Depreciation (20,145,823) (838,921) 155,132 - (20,829,612)
Wastewater Fund Capital Assets, Net 34,297,543 221,431 (9,959) - 34,509,015
Water Reclamation Fund
Construction in Progress 156,909,249 8,623,624 - - 165,532,873
Total Non-Depreciable Assets 156,909,249 8,623,624 - - 165,532,873
Water Reclamation Fund Capital Assets 156,909,249 8,623,624 - - 165,532,873
Total Capital Assets, Net 309,271,006$ 12,988,786$ (2,556,150)$ -$ 319,703,642$
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
48
5) LONG-TERM DEBT
The schedule below summarizes changes in long-term debt during the year ended June 30, 2023:
Table 5-1
Beginning
Balance
(June 30,
2022) Additions
Retirements
/ Payments
Ending
Balance
(June 30,
2023)
Current
Portion
Long-Term
Portion
Direct Placement:
2020A Refunding Bonds 15,990,000$ -$ (940,000)$ 15,050,000$ 990,000$ 14,060,000$
2020A Unamortized Premium 2,958,904 17,555 (163,094) 2,813,365 163,101 2,650,264
2020B Refunding Bonds 13,340,000 - (280,000) 13,060,000 280,000 12,780,000
Subtotal Direct Placement 32,288,904 17,555 (1,383,094) 30,923,365 1,433,101 29,490,264
Direct Borrowing:
U.S. Bank Lease Purchase 878,870$ -$ (434,495)$ 444,375 444,375$ -$
SBVMWD Loan 1,704,019 - (429,019) 1,275,000 425,000 850,000
DWR Contracts:
AVAD Construction 57,478 - (6,762) 50,716 6,762 43,954
Plant 134 Construction 5,368,172 - (233,399) 5,134,773 233,398 4,901,375
EFAD Construction 273,339 - (13,016) 260,323 13,018 247,305
SNRC 139,669,059 16,054,859 - 155,723,918 - 155,723,918
Subtotal Direct Borrowing 147,950,937 16,054,859 (1,116,691) 162,889,105 1,122,553 161,766,552
Total 180,239,841$ 16,072,414$ (2,499,785)$ 193,812,470$ 2,555,654$ 191,256,816$
2020 Revenue Bonds
Series 2020A - On September 10, 2020, the District issued $16,885,000 of East Valley Water District
Refunding Revenue Bonds, Series 2020A (2020A Bonds), to accomplish a current refunding of then outstanding
2010 Revenue Bonds ($21,635,000). The 2020A Bonds carry interest rates ranging from 3.00% to 5.00% and
will be repaid in various principal increments with the final payment due on October 1, 2040. The refunded
2010 Bonds carried interest rates ranging from 4.00% to 5.00% and were due in various principal increments
until October 1, 2040.
The 2020A bonds were issued at a premium of $3,261,890, and after paying issuance costs of $161,885, net
proceeds were $19,985,005. The net proceeds, combined with a $2,129,931 sinking fund for 2010 bond debt
service, were sufficient to accomplish the refunding of the existing debt. All refunded debt has been retired.
The refunding resulted in a difference between the reacquisition price and the carrying amount of the old debt
of $259,548. This difference is included in the accompanying financial statements as a Deferred Outflows of
Resources and is being charged to operations through the year 2040 using the straight-line method of
amortization. The District completed the refunding to decrease total debt service over the next 20 years by
$6,052,794, and to obtain an economic gain (difference between the present values of the old and new debt
service payment) of $4,765,023.
Series 2020B - Also on September 10, 2020, the District issued $13,615,000 of East Valley Water District
Refunding Revenue Bonds, Series 2020B (2020B Bonds), to accomplish an advance refunding of then
outstanding 2013 Revenue Bonds ($12,085,000). The 2020B Refunding Bonds carry interest rates from 0.42
% to 2.93 % (federally taxable) and will be repaid in various principal increments with the final payment due
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
49
5) LONG-TERM DEBT - Continued
on October 1, 2043. The refunded 2013 Bonds carried interest rates ranging from 4.00% to 5.00% and were
due in various principal increments until October 1, 2043.
The 2020B bonds were issued at face value, and after paying issuance costs of $123,500, net proceeds were
$13,491,500. The net proceeds, combined with a $292,563 sinking fund held for 2013 bond debt service, were
used to purchase US Government securities which were deposited in an irrevocable trust with an escrow agent
to provide debt service on the 2013 Bonds until October 1, 2023 on which date all outstanding bonds will be
redeemed. The advance refunding met the requirements of an in-substance defeasance therefore; accordingly,
the 2013 Revenue Bonds are no longer reflected as a liability on the accompanying financial statements.
The refunding resulted in a difference between the reacquisition price and the carrying amount of the old debt
of $259,548. This difference is included in the accompanying financial statements as a Deferred Outflows of
Resources and is being charged to operations through the year 2043 using the straight-line method of
amortization. The District completed the refunding to decrease total debt service over the next 23 years by
$3,014,190, and to obtain an economic gain (difference between the present values of the old and new debt
service payment) of $2,154,117.
US Bank Lease Purchase
On November 13, 2013 the District entered into a Lease Purchase Agreement with US Bancorp Government
Leasing and Finance, Inc. (US Bank), to implement Energy Conservation Measures (ECM) identified in a
comprehensive energy conservation and operational efficiency study prepared by Honeywell International, Inc.
(Honeywell). Honeywell has been contracted to install the facilities necessary to achieve the energy savings
identified in their study, and has guaranteed that the savings will be sufficient to pay the debt service on the
lease with US Bank. Project costs paid to Honeywell, and the amount borrowed from US Bank under the lease
agreement is $3,998,560 with an interest rate of 2.38%. Semi-annual payments are $226,398, to commence
in September 2014 through March 2024. The indenture authorizes, upon default, the Trustee to declare
immediate due and payable the total unpaid principal of the Bonds and accrued interest thereon.
San Bernardino Valley Municipal Water District - City Creek Turnout and Plant 134 Hydroelectric
Station Loan
On January 20, 2015, the District entered into an agreement with the SBVMWD for the construction, financing,
and maintenance of a turnout by which the District’s surface water treatment plant can receive State Project
water. The total amount borrowed for construction of the project is $4,367,927 bearing interest at the State of
California Local Agency Investment Fund (LAIF) apportionment rate, which is 0.75% at June 30, 2022. Debt
service payments are to be made annually on February 1st over ten years.
Department of Water Resources Contract 00C412 - Arroyo Verde Assessment District (AVAD)
On June 30, 2004, the District entered into a Funding Agreement for replacement of distribution pipelines in
the section of the District's service area formerly served by the Arroyo Verde Water Company. The original loan
amount was $169,052 with an annual interest rate of 0%. Semi-annual payments of $3,381 are due through
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
50
5) LONG-TERM DEBT - Continued
January 2031 and are secured by annual assessments to property owners within the Arroyo Verde Assessment
District. The indenture authorizes, upon default, the Trustee to declare immediate due and payable the total
unpaid principal of the Bonds and accrued interest thereon.
Department of Water Resources Contract 10CX110 - Plant 134
On December 21, 2010, the District entered into a Funding Agreement to upgrade treatment methods utilized
by the District's surface water treatment plant (Plant 134). The amount borrowed under the agreement is
$7,001,964 with an annual interest rate of 0%. Semi-annual payments of $116,699 are due through January
2045, and are secured by a pledge of net revenues of the District's water operating fund. The indenture
authorizes, upon default, the State to declare immediate due and payable the total unpaid principal of the debt
and accrued interest thereon.
Department of Water Resources Contract 11CX101 - Eastwood Farms Assessment District (EFAD)
On June 15, 2011 the District entered into a Funding Agreement for replacement of distribution pipelines in the
section of the District's service area formerly serviced by the Eastwood Farms Water Users Association. The
amount of the loan is $390,482 with an annual interest rate of 0%. Semi-annual payments of $6,508 are due
for 30 years through January 2043. Repayment of the loan is secured by annual assessments to property
owners within the Eastwood Farms Assessment District. The indenture authorizes, upon default, the Trustee to
declare immediate due and payable the total unpaid principal of the Bonds and accrued interest thereon.
The aggregate debt service requirements to maturity for long-term debt as of June 30, 2023 are as follows
(excludes unamortized premiums/discounts and the California State Water Resource Control Board Contract C-
06-8106-110):
Table 5-2
Year Ending
June 30,Principal Interest Total
2024 2,392,553$ 983,949$ 3,376,502$
2025 1,983,177 909,493 2,881,365
2026 1,628,177 854,464 2,479,114
2027 1,243,177 808,729 2,051,906
2028 1,278,177 772,613 2,050,790
2029-2033 6,977,425 3,238,672 10,216,097
2034-2038 8,063,757 2,131,896 10,195,653
2039-2043 9,243,758 940,192 10,183,950
2044-2045 2,464,986 29,227 2,494,213
35,275,187$ 10,669,235$ 45,929,590$
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
51
5) LONG-TERM DEBT - Continued
California State Water Resources Control Board Contract C-06-8106-110 – Sterling Natural
Resource Center
On June 26, 2018 the District entered into a Funding Agreement for the construction of a 6 million gallon per
day (mgd) water recycling plant with the State Water Resources Control Board. The initial agreement approves
$11.5 million for design cost reimbursement, with a revised agreement covering design and construction costs
totaling $157 million executed on December 2, 2019. The revised Agreement includes a $6.7 million grant and
a low interest (1.8%) loan for the balance of $150.3 million.
As of June 30, 2023 the District has incurred $138.6 million in design and construction cost, the District has
drawn approximately $126.4 million, $10.3 million is awaiting reimbursement (Due From Other Governments)
of the $150.3 million in loan financing available. Repayment on the loan will begin one year after the completion
of construction and annual installment payments of principal and interest are projected to be approximately
$7.3 million. The District has pledged available water and wastewater revenue for the repayment of the loan,
including the following new revenue streams:
• Wastewater treatment charges (previously paid to the City of San Bernardino);
• Sale of electrical energy produced by plant digesters (beyond energy used on site);
• Local Resource Investment Program fees for recycled water delivered for groundwater recharge; and
• Tipping fees from waste haulers.
Estimated debt service on this loan is not included in Table 5-2 above.
Security for debt is as follows:
Table 5-3
Debt Security
2020A and 2020B Refunding
Revenue Bonds and Department
of Water Resources
Construction Loans
The District is required to maintain net revenues, as
defined by the revenue bond trust agreements and State of
California Department of Public Health Funding agreements
of at least 120% of District's annual debt service (principal
and interest). At June 30, 2023, net water revenues
represented 240% of the annual water debt service and net
wastewater revenues represented 639% of the annual
wastewater debt service.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
52
6) COMPENSATED ABSENCES
Compensated absences are comprised of unused vacation leave and a limited amount of sick leave which is
accrued as earned in accordance with District policy. The District's liability for compensated absences is
determined annually. Current portions are determined based on estimates of usage, amounts in excess of 196
hours that will be voluntarily cashed out and amounts that will be cashed out upon termination of employment.
Table 6-1
Beginning of
Year Additions
Usage /
Payments End of Year
Current
Portion
Long-Term
Portion
Accrued Vacation Leave 630,133$ 658,926$ (586,516)$ 702,543$ 385,383$ 317,160$
Accrued Sick Leave 657,496 432,627 (364,899) 725,224 266,794 458,430
Total 1,287,629$ 1,091,553$ (951,415)$ 1,427,767$ 652,177$ 775,590$
7) NET INVESTMENT IN CAPITAL ASSETS
Net Investment in capital assets at June 30, 2023 consisted of the following:
Table 7-1
Non-Depreciable Capital Assets 203,751,889$
Depreciable Capital Assets 226,996,348
Accumulated Depreciation (111,044,595)
North Fork Water Company 651,683
Loans Payable (176,247,855)
Bonds Payable (30,923,365)
Deferred Inflows - Debt Refunding (1,128,796)
Deferred Ouflows - Debt Refunding 854,647
Total 112,909,956$
8) DEFINED BENEFIT PENSION PLAN (PERS)
A) General Information about the Pension Plans
Plan Description
All qualified permanent and probationary employees are eligible to participate in the Public Agency Cost-
Sharing Multiple-Employer Defined Benefit Pension Plan (Plan or PERF C) administered by the California Public
Employees’ Retirement System (CalPERS.) The Plan consists of a miscellaneous pool and a safety pool (also
referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans,
respectively. Plan assets may be used to pay benefits for any employer rate plan of the safety and
miscellaneous pools. Accordingly, rate plans within the safety or miscellaneous pools are not separate plans
under generally accepted accounting principles. Individual employers may sponsor more than one rate plan
in the miscellaneous or safety risk pools. The District participates in 2 rate plans (two miscellaneous). Benefit
provisions under the Plan are established by State statute and District’s resolution. CalPERS issues publicly
available reports that include a full description of the pension plan regarding benefit provisions, assumptions
and membership information that can be found on the CalPERS website, at www.calpers.ca.gov.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
53
8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued
Benefits Provided
CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death
benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of
credited service, equal to one year of full-time employment. Members with five years of total service are
eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability
benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957
Survivor Benefit, or the Optional Settlement 2 W Death Benefit. The cost-of-living adjustments for each plan
are applied as specified by the Public Employees’ Retirement Law.
The Plan operates under the provisions of the California Public Employees’ Retirement Law (PERL), the
California Public Employees’ Pension Reform Act of 2013 (PEPRA), and the regulations, procedures and
policies adopted by the CalPERS Board of Administration. The Plan’s authority to establish and amend the
benefit terms are set by the PERL and PEPRA, and may be amended by the California state legislature and in
some cases require approval by the CalPERS Board.
The Plans’ provisions and benefits in effect at June 30, 2023, are summarized as follows:
Table 8-1
Prior to On or after
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.7% @55 2.0% @62
Benefit Vesting Schedule 5 years service 5 years service
Benefit Payments monthly for life monthly for life
Retirement Age 50 - 55 52 - 67
Monthly Benefits, as a % of Eligible Compensation 2.0% to 2.7% 1.0% to 2.5%
Required Employee Contribution Rates 8.0%7.0%
Required Employer Contribution Rates 13.66%7.56%
Miscellaneous
Contributions
Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer
contribution rates for all public employers be determined on an annual basis by the actuary and shall be
effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are
determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the
estimated amount necessary to finance the costs of benefits earned by employees during the year, with an
additional amount to finance any unfunded accrued liability. The District is required to contribute the
difference between the actuarially determined rate and the contribution rate of employees.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
54
8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued
For the year ended June 30, 2023, the contributions recognized as part of pension expense for the Plans
were as follows:
Table 8-2
Miscellaneous
Contributions - Employer $ 964,748
B) Pension Liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related
to Pensions
As of June 30, 2023, the District reported net pension liabilities for its proportionate shares of the net
pension liability of the Plans as follows:
Table 8-3
Proportionate Share
of Net Pension
Liability
Miscellaneous $ 13,855,136
The District’s net pension liability for the Plan is measured as the total pension liability, less the pension
plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2022, using
an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 using standard update
procedures. A summary of principal assumptions and methods used to determine the net pension liability
is as follows:
Table 8-4
Proportion - June 30, 2022 0.35063%
Proportion - June 30, 2023 0.29610%
Change - Increase (Decrease)-0.05453%
Miscellaneous
Amortization of Deferred Outflows and Deferred Inflows of Resources
Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are
recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining
amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to
be recognized in future pension expense.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
55
8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued
The amortization period differs depending on the source of the gain or loss:
Net difference between projected and actual
earnings on pension plan investments
5-year straight-line amortization
All other amounts Straight-line amortization over the expected
average remaining service lives (EARSL) of all
members that are provided with benefits (active,
inactive, and retired) as of the beginning of the
measurement period
The expected average remaining service lifetime (EARSL) is calculated by dividing the total future service years
by the total number of plan participants (active, inactive, and retired) in the Public Agency Cost-Sharing
Multiple-Employer Plan (PERF C).
The EARSL for PERF C for the measurement period ending June 30, 2022 is 3.7 years, which was obtained by
dividing the total service years of 574,665 (the sum of remaining service lifetimes of the active employees) by
153,587 (the total number of participants: active, inactive, and retired) in PERF C. Inactive employees and
retirees have remaining service lifetimes equal to 0. Total future service is based on the members' probability
of decrementing due to an event other than receiving a cash refund.
For the year ended June 30, 2023, the District recognized pension expense of $173,810. At June 30, 2023, the
District reported deferred outflows of resources and deferred inflows of resources related to pensions from the
following sources:
Table 8-5
Deferred
Outflows of
Resources
Deferred
Inflows of
R esources
Difference between expected and actual
experience $ 278,238 186,352$
Changes in Assumptions 1,419,748 -
Net differences between projected and actual
earnings on plan investments 2,537,893 -
Change in employer's proportion - 595,037
Difference between the employer's
contributions and the employer's proportionate
s hare of contributions 116,444 819,112
Pension contributions subsequent to
measurement date 964,748 -
Total $ 5,317,071 $ 1,600,501
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
56
8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued
$964,748 reported as deferred outflows of resources related to contributions subsequent to the measurement
date will be recognized as a reduction of the net pension liability in the year ended June 30, 2024. Other
amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will
be recognized as pension expense as follows:
Table 8-6
Year Ended
June 30,Amount
2024 $ 573,249
2025 436,296
2026 190,015
2027 1,552,262
$ 2,751,822
Actuarial Methods and Assumptions Used to Determine Total Pension Liability
The collective total pension liability for the June 30, 2022 measurement period was determined by an actuarial
valuation as of June 30, 2021, with updated procedures used to roll forward the total pension liability to
June 30, 2022. The collective total pension liability was based on the following assumptions:
Table 8-7
Miscellaneous
Valuation Date June 30, 2021
Measurement Date June 30, 2022
Entry Age Normal in accordance with the requirements of GASB
Market Value of Assets
6.90%
2.30%
Varies by Entry Age and Service
Derived using CalPERS' membership data for all Funds
The lesser of contract COLA or 2.30% until Purchasing Power
Protection Allowance floor on purchasing power applies, 2.30%
thereafter
(1)The mortality table used was developed based on CalPERS’ specific data. The probabilities
of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to
2019. Pre-retirement and Post-retirement mortality rates include generational mortality
improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more
details on this table, please refer to the CalPERS Experience Study and Review of Actuarial
Assumptions report from November 2021 that can be found on the CalPERS website.
Mortality Rate Table (1)
Post Retirement Benefit
Increase
Actuarial Cost Method
Asset Valuation Method
Actuarial Assumptions:
Discount Rate
Inflation
Salary Increases
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
57
8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued
Change of Assumptions
Effective with the June 30, 2021, valuation date (2022 measurement date), the accounting discount rate
was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took
into account long-term market return expectations as well as the expected pension fund cash flows.
Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project
compound (geometric) returns over the long-term. The discount rate used to discount liabilities was
informed by the long-term projected portfolio return. In addition, demographic assumptions and the
inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review
of Actuarial Assumptions.
Discount Rate
The discount rate used to measure the total pension liability for PERF C was 6.90%. The projection of cash
flows used to determine the discount rate assumed that contributions from plan members will be made at
the current member contribution rates and that contributions from employers will be made at statutorily
required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was
projected to be available to make all projected future benefit payments of current plan members. Therefore,
the long-term expected rate of return on plan investments was applied to all periods of projected benefit
payments to determine the total pension liability.
Subsequent Events
On July 12, 2021, Cal PERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21.
Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3%
prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for
funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year
Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until
the ALM process concluded, and the board could make its final decision on the asset allocation in November
2021.
On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along
with the new capital market assumptions, economic assumptions and administrative expense assumption
support a discount rate of 6.90% (net of investment expense but without a reduction for administrative
expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from
2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial
Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality
rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected
in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
58
8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued
The table below reflects the long-term expected real rate of return by asset class. The rate of return was
calculated using the capital market assumptions applied to determine the discount rate and asset allocation.
These rates of return are net of administrative expenses.
Table 8-8
Asset Class
Assumed
Asset
A llocation
Real Return
(1)(2)
Global Equity - cap weighted 30.0%4.54%
Global Equity - non-cap-weighted 12.0%3.84%
Private Equity 13.0%7.28%
Treasury 5.0%0.27%
Mortgage-backed securities 5.0%0.50%
Investment grade corporates 10.0%1.56%
High Yield 5.0%2.27%
Emerging market debt 5.0%2.48%
Private debt 5.0%3.57%
Real Assets 15.0%3.21%
Leverage -5.0% -0.59%
Total 100.0% C) Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount
Rate
The following presents East Valley Water District’s proportionate share of the net pension liability for the
Plan, calculated using the current discount rate, as well as what the District’s proportionate share of the
net pension liability would be if it were calculated using a discount rate that is one-percentage point lower
or one-percentage point higher than the current rate:
Table 8-9
Miscellaneous
1% Decrease 5.90%
Net Pension Liability $ 21,373,930
Current Discount Rate 6.90%
Net Pension Liability $ 13,855,136
1% Increase 7.90%
Net Pension Liability $ 7,669,035
D) Pension Plan Fiduciary Net Position
Detailed information about each pension plan’s fiduciary net position is available in the separately issued
CalPERS financial reports.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
59
8) DEFINED BENEFIT PENSION PLAN (PERS) - Continued
E) Payable to the Pension Plan
At June 30, 2023, the District reported a payable of $0 for the outstanding number of contributions to the
pension plan required for the year ended June 30, 2023.
9) COMMITMENTS AND CONTINGENCIES
Grant Awards
Grant funds received by the District are subject to audit by the grantor agencies. Such audit could lead to
requests for reimbursements to the grantor agencies for expenditures disallowed under terms of the grant.
Management of the District believes that such disallowances, if any, would not be significant.
10) RISK MANAGEMENT
The District is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets;
errors and omission; injuries to employees; and natural disasters. The District participates in a joint powers
agreement (JPA) with the Special District Risk Management Authority (Authority). The Authority is a risk-pooling
self-insurance authority created under the provisions of California Government Code Section 6500 et. sec. The
Authority is governed by a Board consisting of 7 directors that are either a manager or Board member of a current
member agency that were elected by members of SDRMA. The Board controls the operations of the Authority
including selection of management and approval of operation budgets. The relationship between the District and
the Authority is such that the Authority is not a component unit of the District for financial reporting purposes.
Settled claims have been immaterial and claims liabilities have not been reported in these financial statements as
of June 30, 2023, or in the previous two fiscal years.
The purpose of the Authority is to arrange and administer programs of insurance for the pooling of self-insured
losses and to purchase excess insurance coverage.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
60
10) RISK MANAGEMENT - Continued
At June 30, 2023, the District's participation in the self-insurance programs of the Authority was as follows:
Table 10-1
Description Deductible
Personal Injury and
Property Damage Liability
Coverage - General
10,000,000$
Per occurrence /
aggregate where
applicable
$500 (property
damage only)
Personal Injury and
Property Damage Liability
Coverage - Auto
10,000,000$ Per accident None
Public Officials and
Employees Errors and
O missions Liability
10,000,000$ Per wrongful act / annual
member aggregate None
Employment Practices
Liability 10,000,000$
Per wrongful employment
practice / aggregate limits
per member included with
Public Officials and
Employee Errors and
Omissions Coverage
None up to $10,000,
50% co-insurance from
$10,000 to $50,000,
none for amounts
greater than $50,000
Employee Benefits Liability 10,000,000$ Per wrongful act / annual
member aggregate None
Employee Dishonesty
Coverage 1,000,000$ Per loss None
Public Officials Personal
Liability 500,000$
Per occurrence / annual
aggregate per Board
Member
$ 500
Automobile Physical
Damage ACV Limits
Replacement cost (stated
value adjusted for
depreciation on selected
vehicles)
$250/$500 or
$500/$1,000
comprehensive /
collision (as elected per
vehicle)
Uninsured Motorist Bodily
Injury Coverage 750,000$ Per accident None
Property Coverage 1,000,000,000$
Replacement cost for
scheduled property if
replaced (if not replaced
within two years, actual
cash value basis)
$ 1,000
Boiler and Machinery 100,000,000$ Replacement cost $ 1,000
Limits
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
61
11) POST-EMPLOYMENT HEALTHCARE BENEFITS
The District provides post-employment healthcare benefits for retired employees and eligible surviving spouses
in accordance with the plan as established by the District. As of June 30, 2023, the District’s total liability for
post-employment healthcare benefits and details of the plan are explained below:
Table 11-1
OPEB Plan
Net OPEB
Liability
Deferred
Outflows of
Resources
Deferred Inflows
of Resources
OPEB
Expense
Retiree Benefits Plan 1,986,360$ 1,184,326$ 326,072$ 311,790$
Plan Description and Eligibility
The District contributes to the retiree health coverage of eligible retirees and eligible surviving spouses. As of
June 7, 2011, the District is part of the Public Agency portion of the California Employers’ Retiree Benefit Trust
Fund (CERBT), an agent multiple-employer plan administered by California Public Employees’ Retirement
System (CalPERS), which acts as a common investment and administrative agent for participating public
employers within the State of California. A menu of benefit provisions as well as other requirements is
established by State statute within the Public Employees’ Retirement Law. The District selects optional benefit
provisions from the benefit menu by contract with CalPERS and adopts those benefits through District
resolution. CalPERS issues an Annual Comprehensive Financial Report (Report). The Report is issued in
aggregate and includes the sum of all CalPERS plans. Copies of the CalPERS Report may be obtained from the
CalPERS Executive Office, 400 P Street, Sacramento, California 95814.
Membership in the health benefit plan consisted of the following at July 1, 2023, the date of the latest actuarial
valuation:
Table 11-2
Participant Type
27
0
Active employees 65
92
Number of
Participants
Inactive participants currently receiving benefits
Inactive participants entitled to but not yet receiving benefit
Total
Funding Policy
The contribution requirements of plan members and the District are established and may be amended by the
Board of Directors. At retirement, the District provides the minimum employer contribution under the CalPERS
Health Program for eligible retirees and surviving spouses in receipt of a pension benefit from CalPERS. An
employee is eligible for this employer contribution provided they are vested in their CalPERS pension benefit
and commence payment of their pension benefit within 120 days of retirement with the District. Vesting requires
at least five years of service. The surviving spouse of an eligible retiree who elected spouse coverage under
CalPERS is eligible for the employer contribution upon death of the retiree.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
62
11) POST-EMPLOYMENT HEALTHCARE BENEFITS - Continued
Employees retiring with at least 10 years of District service will receive an additional District contribution through
attainment of Medicare eligibility age. The additional contribution is based on the negotiated dollar amount at
retirement (currently $850 per month). The surviving spouse of an eligible retiree is eligible for the District's
contribution upon the death of the retiree through the spouse's attainment of Medicare eligibility age.
The District’s funding policy is to contribute the Annual Determined Contribution (ADC) to their account within
the CERBT. For fiscal year ended June 30, 2022, the District paid $556,222 to the plan including the implicit
rate subsidy. The District contributed $348,363 including the implicit rate subsidy for retiree health benefits to
the Trust during the fiscal year ended June 30, 2023.
Net OPEB Liability
The table herein shows the components of the net OPEB liability of the District:
Table 11-3
Balance
June 30, 2023
Total OPEB Liability $ 3,567,214
Plan Fiduciary Net Position (1,580,854)
District's Net OPEB Liability (Asset) $ 5,148,068
Investments
As described above, at June 30, 2023, all Plan investments are held in the CERBT through CalPERS.
Deferred Outflows of Resources and Deferred Inflows of Resources Related to OPEB
At June 30, 2023, the District reported deferred outlflows of resources and deferred inflows of resources related
to pensions from the sources as follows:
Table 11-4
Deferred Outflows and Inflows of Resources
Deferred
Outflows of
Resources
Deferred
Inflows of
Resources
Contributions subsequent to measurement date 332,001$ -$
Differences between expected and actuarial experience 391,150 155,907
Changes of assumptions 306,132 170,165
Differences between projected and actual earnings on
OPEB plan investments 155,043 -
Total 1,184,326$ 326,072$
The deferred outflow of resources results from a change of assumptions and is amortized over the expected
average remaining service life (EARSL) of the plan participants. Contributions submitted subsequent to the
measurement date will be recognized in the following fiscal year. The EARSL for the OPEB plan for
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
63
11) POST-EMPLOYMENT HEALTHCARE BENEFITS - Continued
June 30, 2023 is five years. The year of amortization is recognized in OPEB expense for the year the gain or
loss occurs. The remaining amount is deferred and will be amortized over the remaining periods not to exceed
four years.
The deferred inflows of resources related to OPEB resulting from the net differences between projected and
actual earnings on planned investments is amortized over a five-year period on a straight-line basis. One-fifth
is recognized in pension expense during the measurement period and the remaining amount is deferred and
will be amortized over the remaining four-year period.
Deferred inflows and outflows will be amortized as follow:
Table 11-5
Year Ending
June 30, Amortization
2024 $ 81,971
2025 82,665
2026 78,811
2027 105,300
2028 48,426
Thereafter 129,080
$ 526,253
Actuarial Methods and Assumptions
The District’s net OPEB liability was measured as of June 30, 2022, and the total OPEB liability used to calculate
the net OPEB liability was determined by an actuarial valuation as of June 30, 2022. Liabilities in this report
were calculated as of the valuation date.
The total OPEB liability was determined by an actuarial valuation as of June 30, 2022, using the actuarial
assumptions shown herein, applied to all periods included in the measurement, unless otherwise specified.
Table 11-6
Actuarial Methods and Assumptions
Valuation Date June 30, 2022
Measurement Date June 30, 2022
Inflation 2.50%
Salary Increases 2.75%
Investment Rate of Return 5.50%
Health Care Trend Rate 6.25% HMO / 6.25% PPO
Mortality rates were based upon the rates under the CalPERS pensions plan updated to reflect the most recent
experience study.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
64
11) POST-EMPLOYMENT HEALTHCARE BENEFITS - Continued
The long-term expected rate of return on Plan investments was determined using a building-block method in
which best-estimate ranges of expected future real rates of return (expected returns, net of OPEB plan
investment expense and inflation) are developed for each major asset class. These ranges are combined to
produce the long-term expected rate of return by weighting the expected future real rates of return by the
target asset allocation percentage and by adding expected inflation. Best estimates of arithmetic real rates of
return for each major asset class included in the OPEB plan’s target asset allocation at June 30, 2022 are shown
herein:
Table 11-7
Asset Class
Global Equity 34%N/A
Fixed Income 41%N/A
Treasury Inflation - Protected Securities 5%N/A
Commodities 3%N/A
Real Estate Investment Trusts 17%N/A
Total 100% 5.50%
Target
Allocation
L/T Expected
Gross ROR
The discount rate used to measure the total OPEB liability was 5.5 percent. The discount rate assumes the
District continues to fully fund its retiree health benefits through the CERBT under its investment allocation
strategy 2. The rate reflects the CERBT published median interest rate for strategy 2 with an additional margin
for adverse deviation.
Changes in the Net OPEB Liability
Table 11-8
Total OPEB
Liability
(a)
Plan Fiduciary
Net Position
(b)
Liability
(Asset)
(a) - (b)
Balances at June 30, 2022 $ 3,276,038 $ 1,414,163 $ 1,861,875
Changes for the year:
Service Cost 118,145 - 118,145
Interest 213,973 - 213,973
Differences between expected
and actual experience (173,230) - (173,230)
Employer Contributions - 556,222 (556,222)
Net Investment Income - (181,313) 181,313
Change of assumptions 340,147 - 340,147
Benefit Payments (207,859) (207,859) -
Administrative Expenses - (359) 359
Other Expenses - - -
Net Changes 291,176 166,691 124,485
Balances at June 30, 2023 $ 3,567,214 $ 1,580,854 $ 1,986,360
Increase (Decrease)
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
65
11) POST-EMPLOYMENT HEALTHCARE BENEFITS - Continued
The following presents the District’s net OPEB liability calculated using the discount rate of 5.5 percent, as well
as what the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point
lower (4.5 percent) or 1-percentage-point higher (6.5 percent) than the current rate:
Table 11-9
Discount Rate
Net OPEB Liability
(Asset)
2,382,842$
1,986,360$
1,646,214$
1% Decrease (4.50%)
Current Discount Rate (5.50%)
1% Increase (6.50%)
The following presents the District’s net OPEB liability calculated using the current healthcare cost trend rate
of 6.25 percent, as well as what the net OPEB liability would be if it were calculated using healthcare cost trend
rates that are 1-percentage-point lower (5.25 percent) or 1-percentage-point higher (7.25 percent) than the
current rate:
Table 11-10
Healthcare Trend Rate
Net OPEB Liability
(Asset)
1% Decrease (5.25% HMO/5.25% PPO Decreasing to 3.50%
HMO/3.50% PPO)1,450,377$
Current Healthcare Cost Trend Rates (6.25% HMO/6.25% PPO
Decreasing to 4.50% HMO/4.50% PPO)1,986,360$
1% Increase (7.25% HMO/7.25%PPO Decreasing to 5.50%
HMO/5.50% PPO)2,403,025$
OPEB Expense
For the year ended June 30, 2023, the District recognized OPEB expense of $311,790 and recorded deferred
outflows of resources of $1,184,326 for contributions made during fiscal year 2023 after the measurement
date. The deferred outflows will be recognized in OPEB expense for the period ending June 30, 2024.
The District recorded $326,072 of deferred inflows of resources resulting from the differences between
projected and actual earnings on OPEB plan investments for the period ending June 30, 2022. The deferred
inflows of resources will be amortized and recognized in OPEB expense over three remaining periods ending
June 30, 2026.
EAST VALLEY WATER DISTRICT
Notes to the Basic Financial Statements
Year Ended June 30, 2023
66
12) CONSTRUCTION AND OTHER SIGNIFICANT COMMITMENTS
The District has six significant active construction project commitments as of June 30, 2023. The following
contracts are related to the construction of the Recycled Water Facility.
Table 12-1
Contractual Commitments Spent to Date
Remaining
Commitment
Valve Truck - Ford Super Duty F-550 Flatbed -$ 247,429$
Drought Contingency Plan Development, Management,
and Preparation 63,106$ 325,894$
Water Main Seismic Retrofit 455,288$ 728,712$
Design-Build Services of additional water storage in the
District's Canal Pressure Zone 120,440$ 618,788$
Design-Build Services of the Recycled Water Facility 213,343,235$ 5,666,880$
Design-Build Services of the Digester 18,513,544$ 1,715,500$
67
East Valley Water District
Schedule of District’s Proportionate Share of the Net Pension Liability
Year Ended June 30, 2023
Last Ten Years*
The accompanying notes to required supplementary information are an integral part of this schedule.
69
Schedule of District’s Proportionate Share of the Net Pension Liability
The schedule presents information on the District’s proportionate share of the net pension liability, the plans’ fiduciary
net position and, when applicable, the proportionate share of the net pension liability associated with the District. In
the future, as data becomes available, 10 years of information will be presented.
2023 2022 2021 2020
Proportion of the Net Pension
Liability 0.119950% 0.123102% 0.113169% 0.115205%
Proportionate Share of the Net
Pension Liability $ 13,855,136 $ 6,657,689 $ 12,313,294 $ 11,805,140
Covered Payroll $ 6,536,459 $ 6,188,589 $ 5,888,338 $ 5,658,626
Proportionate Share of the Net
Pension Liability as Percentage of
Covered Payroll 211.97% 107.58% 209.11% 208.62%
Plan's Fiduciary Net Position $ 41,301,132 $ 44,006,462 $ 36,172,219 $ 34,016,773
Plan's Fiduciary Net Position as a
Percentage of the Total Pension
Liability 74.88% 86.86% 77.71% 77.73%
2019 2018 2017 2016 2015
Proportion of the Net Pension
Liability 0.28782%0.11699% 0.11585% 0.11551% 0.10632%
Proportionate Share of the Net
Pension Liability $ 10,846,955 $ 11,601,798 $ 10,024,712 $ 7,928,173 $ 6,615,935
Covered Payroll $ 5,447,702 $ 4,489,575 $ 5,097,156 $ 4,715,712 $ 4,436,236
Proportionate Share of the Net
Pension Liability as Percentage of
Covered Payroll 199.11%258.42% 196.67% 168.12% 149.13%
Plan's Fiduciary Net Position $ 33,563,265 $ 27,706,747 $ 27,529,345 $ 28,045,198 $ 29,336,566
Plan's Fiduciary Net Position as a
Percentage of the Total Pension
Liability 77.69%71.37% 74.06% 78.40% 79.82%
Note: Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.
East Valley Water District
Schedule of District’s Contributions
Year Ended June 30, 2023
Last Ten Years*
The accompanying notes to required supplementary information are an integral part of this schedule.
70
Schedule of District’s Contributions
The schedule presents information on the District’s required contribution, the amounts actually contributed, and
any excess or deficiency related to the required contribution. In the future, as data becomes available, 10 years of
information will be presented.
2023 2022 2021 2020
Contractually Required
Contribution (Actuarially
Determined)964,748$ 1,019,834$ 1,900,537$ 1,798,495$
Contributions in Relation to
the Actuarially Determined
Contributions 964,748$ 1,019,834$ 1,900,537$ 1,798,495$
Contribution Deficiency
(Excess)-$ -$ -$ -$
Covered Payroll $ 7,289,703 $ 6,536,459 $ 6,188,589 $ 5,888,338
Contributions as a Percentage
of Covered Payroll 13.23% 15.60% 30.71% 30.54%
2019 2018 2017 2016 2015
Contractually Required
Contribution (Actuarially
Determined)1,228,277$ 1,579,268$ 1,035,102$ 895,822$ 742,546$
Contributions in Relation to
the Actuarially Determined
Contributions 1,228,277$ 1,579,268$ 1,035,102$ 895,822$ 742,546$
Contribution Deficiency
(Excess)-$ -$ -$ -$ -$
Covered Payroll $ 5,658,626 $ 5,447,702 $ 4,489,575 $ 5,097,156 $ 4,715,712
Contributions as a Percentage
of Covered Payroll 21.71% 28.99% 23.06% 17.57% 15.75%
Note: Fiscal year 2015 was the first year of implementation, therefore only nine years are shown.
East Valley Water District
Schedule of Changes in the Net OPEB Liability
Year Ended June 30, 2023
Last Ten Years*
The accompanying notes to required supplementary information are an integral part of this schedule.
71
Schedule of Changes in the Net OPEB Liability
Accounting standards require presentation of 10 years of information. However, the information in this schedule is
not required to be presented retroactively. Years will be added to this schedule as future data becomes available.
Total OPEB Liability 2023
Service Cost 118,145$
Interest 213,973
Differences bewteen
exptected and actual
experience
(173,230)
Changes of assumptions 340,147
Benefit Payments, including
refunds of member
contributions
(207,859)
Net Change in Total OPEB
Liability 291,176
Total OPEB Liability - Beginning 3,276,038
Total OPEB Liability - Ending (a)3,567,214$
Plan Fiduciary Net Position 2023
Contributions - Employer 556,222$
Net Investment Income (181,313)
Benefit Payments (207,859)
Administrative Expense (359)
Other Expense -
Net Change in Plan Fiduciary
Net Position 166,691$
Plan Fiduciary Net Position -
Beginning 1,414,163
Plan Fiduciary Net Position -
Ending (b)1,580,854$
Net OPEB Liability (Asset) -
Ending (a) - (b)1,986,360$
Plan Fiduciary Net Position as a
Percentage of the Total OPEB
Liability 44.32%
Covered Payroll 5,847,005$
Net OPEB Liability (Asset) as a
Percentage of Covered-
Employee Payroll
33.97%
(Continued) Note: Fiscal year 2018 was the first year of implementation, therefore only six years are shown.
East Valley Water District
Schedule of Changes in the Net OPEB Liability
Year Ended June 30, 2023 – Continued
Last Ten Years*
The accompanying notes to required supplementary information are an integral part of this schedule.
72
Schedule of Changes in the Net OPEB Liability
Accounting standards require presentation of 10 years of information. However, the information in this schedule is
not required to be presented retroactively. Years will be added to this schedule as future data becomes available.
Total OPEB Liability 2022 2021 2020 2019 2018
Service Cost 122,441$ 122,428$ 106,297$ 103,452$ 97,138$
Interest 199,913 189,204 174,233 166,826 160,043
Differences bewteen
exptected and actual
experience
278,335 75,893 192,265 - -
Changes of assumptions (163,361) - (65,796) - -
Benefit Payments, including
refunds of member
contributions
(225,321) (220,316) (168,787) (149,550) (168,724)
Net Change in Total OPEB
Liability 212,007 167,209 238,212 120,728 88,457
Total OPEB Liability - Beginning 3,064,031 2,896,822 2,658,610 2,537,882 2,449,425
Total OPEB Liability - Ending (a)3,276,038$ 3,064,031$ 2,896,822$ 2,658,610$ 2,537,882$
Plan Fiduciary Net Position 2022 2021 2020 2019 2018
Contributions - Employer 412,106$ 405,008$ 278,539$ 149,548$ 218,724$
Net Investment Income 204,887 38,644 48,769 37,365 36,877
Benefit Payments (225,321) (220,316) (168,787) (149,548) (168,724)
Administrative Expense - - (330) - (261)
Other Expense (563) (427) (240) (683) -
Net Change in Plan Fiduciary
Net Position 391,109$ 222,909$ 157,951$ 36,682$ 86,616$
Plan Fiduciary Net Position -
Beginning 1,023,054 800,145 642,194 605,512 518,896
Plan Fiduciary Net Position -
Ending (b)1,414,163$ 1,023,054$ 800,145$ 642,194$ 605,512$
Net OPEB Liability (Asset) -
Ending (a) - (b)1,861,875$ 2,040,977$ 2,096,677$ 2,016,416$ 1,932,370$
Plan Fiduciary Net Position as a
Percentage of the Total OPEB
Liability 43.17% 33.39% 27.62% 24.16% 23.86%
Covered Payroll 5,902,604$ 5,744,627$ 5,495,000$ 5,495,000$ 5,220,250$
Net OPEB Liability (Asset) as a
Percentage of Covered-
Employee Payroll
31.54% 35.53% 38.16% 36.70% 37.02%
Note: Fiscal year 2018 was the first year of implementation, therefore only six years are shown.
East Valley Water District
Schedule of OPEB Healthcare Contributions
Year Ended June 30, 2023
Last Ten Years*
The accompanying notes to required supplementary information are an integral part of this schedule.
73
Schedule of OPEB Healthcare Contributions
Accounting standards require presentation of 10 years of information. However, the information in this schedule is
not required to be presented retroactively. Years will be added to this schedule as future data becomes available.
OPEB Contributions 2023
Actuarially Determined
Contribution (ADC)332,001$
Contributions in Relation to
the ADC (556,222)
Contribution Deficiency
(Excess)(224,221)$
District's Covered Payroll 6,007,798$
Contributions as a Percentage
of Covered-Employee Payroll 5.53%
OPEB Contributions 2022 2021 2020 2019 2018
Actuarially Determined
Contribution (ADC)348,363$ 350,024$ 362,533$ 285,551$ 144,415$
Contributions in Relation to
the ADC (412,106) (405,008) (278,539) (149,548) (218,724)
Contribution Deficiency
(Excess)(63,743)$ (54,984)$ 83,994$ 136,003$ (74,309)$
District's Covered Payroll 5,847,000$ 5,903,000$ 5,745,000$ 5,495,000$ 5,495,000$
Contributions as a Percentage
of Covered-Employee Payroll 5.96% 5.93% 6.31% 5.20% 2.63%
Note: Fiscal year 2018 was the first year of implementation, therefore only six years are shown.
East Valley Water District
Notes to the Required Supplementary Information
Purpose of Schedules
Year Ended June 30, 2023
74
Schedule of District’s Proportionate Share of the Net Pension Liability
The schedule presents information on the District’s proportionate share of the net pension liability, the plans’ fiduciary
net position and, when applicable, the State’s proportionate share of the net pension liability associated with the
District. In the future, as data becomes available, 10 years of information will be presented.
Schedule of District’s Contributions
The schedule presents information on the District’s required contribution, the amounts actually contributed, and any
excess or deficiency related to the required contribution. In the future, as data becomes available, 10 years of
information will be presented.
Schedule of Changes in Net OPEB Liability
The schedule is intended to show the funded status of the District’s actuarially determined liability for postemployment
benefits other than pensions. In the future, as data becomes available, 10 years of information will be presented.
Schedule of OPEB Healthcare Contributions
The schedule presents information on the District’s required contribution, the amounts actually contributed, and any
excess or deficiency related to the required contribution. In the future, as data becomes available, 10 years of
information will be presented. Pertinent valuation dates and methods and assumptions used to determine the OPEB
liability and required contributions are as follows:
Measurement Date June 30, 2022
Valuation Date June 30, 2022
Methods and Assumptions Used to Determine Contribution Rates:
Actuarial Cost Method Entry Age Normal
Amortization Method Level Percentage of Payroll
Remaining Amortization Period 12 years
Assets Valuation Method 5 Year
Inflation 2.50%
Salary Increases
2.75% Annually Plus Merit
Increases Based on 2017
Experience Study
Investement Rate of Return 5.50%
75
76
77
East Valley Water District
History and Organization
Year Ended June 30, 2023
78
Formation of the District
The Board of Supervisors of San Bernardino County approved a petition in writing for the formation of the East Valley
Water District (formerly East San Bernardino County Water District) under Division 12 of the Water Code of the State
of California and ordered an election held January 12, 1954. The formation of the District was voted for by the electors.
The Board of Supervisors of San Bernardino County, by action on January 18, 1954, approved the formation of the
District. Incorporation of the "East Valley Water District" was approved by the State of California on February 1, 1954.
East Valley Water District Financing Authority
The East Valley Water District Financing Authority (Authority) is a public body organized and existing under a Joint
Exercise of Powers Agreement, and under the Constitution and laws of the State of California, between East Valley
Water District and the California Municipal Finance Authority. The Authority was formed to assist in the financing and
refinancing of capital improvement projects of the District for the use, benefit, and enjoyment of the public.
Nature of Business
The District has been engaged in the furnishing of water service and wastewater transmission services to its customers
since inception.
Location
The District office is located at 31111 Greenspot Road, Highland, California. The office is situated within the District's
boundaries which encompass an area of approximately 30.1 square miles within the County of San Bernardino,
California.
Directors
Phillip R. Goodrich Chairman of the Board
James Morales, Jr.Vice-Chairman of the Board
David E. Smith Governing Board Member
Ronald L. Coats Governing Board Member
Chris Carrillo Governing Board Member
East Valley Water District
Phillip R. Goodrich President
James Morales, Jr.Vice-President
Michael Moore Secretary/Executive Director
Brian W. Tompkins Director of Finance
East Valley Water District Financing Authority
Management
Michael Moore General Manager/CEO
Brian W. Tompkins Chief Financial Officer/Treasurer
East Valley Water District
District General Counsel
Jean Cihigoyenetche JC Law Firm
East Valley Water District
East Valley Water District
Combining Schedule of Net Position
June 30, 2023
79
Water Wastewater
Water
Reclamation Eliminations Total
ASSETS
Current Assets:
Cash and Cash Equivalents 9,551,007$ 914,904$ -$ -$ 10,465,911$
Investments 3,309,627 2,019,618 - - 5,329,245
Accounts Receivable, Net 5,080,958 311,472 548,409 - 5,940,839
Interest Receivable 73,545 - - - 73,545
Other Receivables 1,847,810 - - - 1,847,810
Due From Other Fund 13,597,742 14,655,612 - (28,253,354) -
Due from Other Governments - - 20,552,300 - 20,552,300
Inventory 968,099 6,721 - - 974,820
Prepaid Expenses 224,720 32,080 - - 256,800
Total Current Assets 34,653,508 17,940,407 21,100,709 (28,253,354) 45,441,270
Non-Current Assets:
Restricted Cash and Cash Equivalents 6,473,212 3,147,881 2,736,801 - 12,357,894
Assessments Receivable 263,478 - - - 263,478
Capital Assets not being Depreciated 20,707,049 17,511,967 165,532,873 - 203,751,889
Capital Assets, Net (Note 4)98,954,705 16,997,048 - - 115,951,753
Total Non-Current Assets 126,398,444 37,656,896 168,269,674 - 332,325,014
Total Assets 161,051,952 55,597,303 189,370,383 (28,253,354) 377,766,284
DEFERRED OUTFLOWS OF RESOURCES
Deferred Charge on Refunding 581,827 272,820 - - 854,647
Deferred Outflows - Pensions 4,125,794 1,191,277 - - 5,317,071
Deferred Outflows - OPEB 829,028 355,298 - - 1,184,326
Total Deferred Outflows 5,536,649 1,819,395 - - 7,356,044
Total Assets and Deferred
Outflows of Resources 166,588,601$ 57,416,698$ 189,370,383$ (28,253,354)$ 385,122,328$
(Continued)
East Valley Water District
Combining Schedule of Net Position – Continued
June 30, 2023
80
Water Wastewater
Water
Reclamation Eliminations Total
LIABILITIES
C urrent Liabilities:
Accounts Payable and Accrued Expenses 8,217,541$ 193,817$ 11,780$ -$ 8,423,138$
Accrued Payroll and Benefits 576,789 174,600 73,988 - 825,377
Customer Service Deposits 1,403,962 - - - 1,403,962
Construction Advances and Retentions 514,309 3,011,871 8,616,385 - 12,142,565
Accrued Interest Payable 239,067 24,711 - - 263,778
Current Portion of Compensated
Absences 449,527 137,617 65,033 - 652,177
Current Portion of Long-Term Debt 2,380,654 175,000 - - 2,555,654
Due To Other Fund - 6,500,000 21,753,354 (28,253,354) -
Due To Other Governnents 135,523 - - - 135,523
Total Current Liabilities 13,917,372 10,217,616 30,520,540 (28,253,354) 26,402,174
Non-Current Liabilities:
Compensated Absences,
Less Current Portion 530,612 127,575 117,403 - 775,590
Net Pension Liability 10,600,994 3,254,142 - - 13,855,136
Net OPEB Liability 1,390,452 595,908 - - 1,986,360
Long-Term Debt, Less Current Portion 31,327,898 4,205,000 155,723,918 - 191,256,816
Total Non-Current Liabilities 43,849,956 8,182,625 155,841,321 - 207,873,902
Total Liabilities 57,767,328 18,400,241 186,361,861 (28,253,354) 234,276,076
DEFERRED INFLOWS OF RESOURCES
Deferred Inflows - Refunding 1,128,796 - - - 1,128,796
Deferred Inflows - Pensions 1,361,421 239,080 - - 1,600,501
Deferred Inflows - OPEB 228,250 97,822 - - 326,072
Total Deferred Inflows 2,718,467 336,902 - - 3,055,369
Total Liabilities and Deferred
Inflows of Resources 60,485,795 18,737,143 186,361,861 (28,253,354) 237,331,445
NET POSITION
Net Investment in Capital Assets 86,057,916 26,852,040 - - 112,909,956
Restricted for:
Future Capital Expansion Projects 4,605,274 3,147,881 3,008,522 - 10,761,677
Unrestricted 15,439,616 8,679,634 - - 24,119,250
Total Net Position 106,102,806$ 38,679,555$ 3,008,522$ -$ 147,790,883$
East Valley Water District
Combining Schedule of Revenues, Expenses, and Changes in Net Position
Year Ended June 30, 2023
81
Water Wastewater
Water
Reclamation Eliminations Total
OPERATING REVENUE
Water Sales 17,004,576$ -$ -$ -$ 17,004,576$
Wastewater Treatment Charges - - 10,108,850 - 10,108,850
System Charges 9,831,561 5,651,554 - - 15,483,115
Other Revenue 1,073,128 140,343 - - 1,213,471
Total Operating Revenue 27,909,265 5,791,897 10,108,850 - 43,810,012
OPERATING EXPENSES
Source of Supply:
Salary & Benefits 379,114 - - - 379,114
Contract Services 359,689 - - - 359,689
Utilities 2,645,670 - - - 2,645,670
Insurance 4,344 - - - 4,344
Materials & Supplies 83,705 - - - 83,705
Purchased Water 141,188 - - - 141,188
Water Assessments 115,973 - - - 115,973
Chemicals 135,241 - - - 135,241
Professional Development 234 - - 234
Taxes 25,476 - - - 25,476
Total Source of Supply 3,890,634 - - - 3,890,634
Pumping:
Salary & Benefits 168,229 - - - 168,229
Contract Services 57,993 - - - 57,993
Utilities 762,784 - - - 762,784
Materials & Supplies 14,032 - - - 14,032
Total Pumping 1,003,038 - - - 1,003,038
Treatment:
Salary & Benefits 459,166 - 865,059 - 1,324,225
Contract Services 264,564 - 8,543,156 - 8,807,720
Utilities 168,266 - 178,367 - 346,633
Materials & Supplies 163,790 - 7,185 - 170,975
Legal Services - - 1,960 - 1,960
Chemicals 156,860 - - - 156,860
Memberships & Dues - - 602 - 602
Tools - - 1,746 - 1,746
Printing & Publishing - - 970 - 970
Professional Development - - 2,416 - 2,416
Total Treatment 1,212,646 - 9,601,461 - 10,814,107
Transmission & Distribution:
Salary & Benefits 2,658,220 - - - 2,658,220
Contract Services 650,095 - - - 650,095
Materials & Supplies 910,949 - - - 910,949
Chemicals 30,516 - - - 30,516
Permits 6,835 - - - 6,835
Tools 54,991 - - - 54,991
Total Transmission & Distribution 4,311,606$ -$ -$ -$ 4,311,606$
(Continued)
East Valley Water District
Combining Schedule of Revenues, Expenses, and Changes in Net Position -Continued
Year Ended June 30, 2023
82
Water Wastewater
Water
Reclamation Eliminations Total
OPERATING EXPENSES - Continued
Wastewater Collection:
Salary & Benefits -$ 581,538$ -$ -$ 581,538$
Contract Services - 154,229 - - 154,229
Materials & Supplies - 9,607 - - 9,607
Tools - 7,115 - - 7,115
Total Wastewater Collection - 752,489 - - 752,489
Customer Accounts:
Salary & Benefits 876,660 277,854 - - 1,154,514
Contract Services 618,220 262,319 - - 880,539
Utilities 5,372 2,405 - - 7,777
Materials & Supplies 5,593 - - - 5,593
General Office Supplies 8,217 1,567 - - 9,784
Printing & Publishing 7,276 3,118 - - 10,394
Postage 130,524 55,939 - - 186,463
Professional Development 1,877 804 - - 2,681
Total Customer Accounts 1,653,739 604,006 - - 2,257,745
General & Administrative:
Salary & Benefits 3,931,251 1,953,106 87,769 - 5,972,126
Contract Services 2,589,528 794,784 409,853 - 3,794,165
Conservation Rebates 227,661 - - - 227,661
Utilities 402,917 60,088 109,842 - 572,847
Insurance 923,621 238,174 8,811 - 1,170,606
Materials & Supplies 366,432 123,076 62,879 - 552,387
General Office Supplies 32,247 16,607 - - 48,854
Legal Services 142,388 61,365 - - 203,753
Permits 35,742 25,086 - - 60,828
Memberships & Dues 110,503 40,295 - - 150,798
Tools 15,336 2,077 1,037 - 18,450
Printing & Publishing 177,937 87,060 - - 264,997
Professional Development 126,270 39,419 - - 165,689
Rents & Leases 9,337 3,587 5,055 - 17,979
Total General & Administrative 9,091,170 3,444,724 685,246 - 13,221,140
OPERATING EXPENSES BEFORE
DEPRECIATION 21,162,833 4,801,219 10,286,707 - 36,250,759
Depreciation 5,425,456 838,921 - - 6,264,377
Total Operating Expenses 26,588,289 5,640,140 10,286,707 - 42,515,136
OPERATING INCOME (LOSS)1,320,976$ 151,757$ (177,857)$ -$ 1,294,876$
(Continued)
East Valley Water District
Combining Schedule of Revenues, Expenses, and Changes in Net Position - Continued
Year Ended June 30, 2023
83
Water Wastewater
Water
Reclamation Eliminations Total
NON-OPERATING REVENUES
Investment Income 323,438$ 28,835$ -$ -$ 352,273$
Gain on Disposal of Assets 23,669 6,465 - 30,134
Other Income 49,404 - - - 49,404
Total Non-Operating Revenues 396,511 35,300 - - 431,811
NON-OPERATING EXPENSES
Interest Expense 756,845 112,552 - - 869,397
Unrealized Investment Losses 55,399 31,881 - 87,280
Total Non-Operating Expenses 812,244 144,433 - - 956,677
INCOME BEFORE CONTRIBUTIONS 905,243 42,624 (177,857) - 770,010
CONTRIBUTIONS:
Capacity Charges 967,401 443,041 449,578 - 1,860,020
Operating Grants 57,339 4,693 - - 62,032
Total Contributions 1,024,740 447,734 449,578 - 1,922,052
CHANGE IN NET POSITION 1,929,983 490,358 271,721 - 2,692,062
TOTAL NET POSITION, BEGINNING 104,172,823 38,189,197 2,736,801 - 145,098,821
TOTAL NET POSITION, ENDING 106,102,806$ 38,679,555$ 3,008,522$ -$ 147,790,883$
84
East Valley Water District
Combining Schedule of Cash Flows
Year Ended June 30, 2023
85
Water Wastewater
Water
Reclamation Eliminations Total
CASH FLOWS FROM OPERATING ACTIVITIES
Cash Received from Customers 29,143,215$ 6,300,954$ 9,560,441$ -$ 45,004,610$
Cash Payments for Employees Services (9,625,431) (1,964,945) (696,404) - (12,286,780)
Cash Payments to Suppliers (9,542,486) (2,467,822) (9,322,099) - (21,332,407)
Misc Income / (Expense)49,404 - - - 49,404
Net Cash Provided
by Operating Activities 10,024,702 1,868,187 (458,062) - 11,434,827
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Assessments Received 93,827 - - - 93,827
Proceeds from Sale of Capital Assets 23,669 16,424 - - 40,093
Developer Fees Received 967,401 443,041 449,578 - 1,860,020
Reimbursements Received - - 3,103,376 - 3,103,376
Proceeds/Draws from SRF Loan - - 2,705,185 - 2,705,185
Grant Fund Received 57,339 4,693 - - 62,032
Due (From) To Water Fund - 999,433 1,946,638 (2,946,071) -
Due (From) To Reclamation Fund (1,108,517) (1,837,554) - 2,946,071 -
Principal Paid on Capital Debt (2,161,691) (175,000) - - (2,336,691)
Interest Paid on Capital Debt (925,492) (99,315) - - (1,024,807)
Acquisition of Capital Assets (6,802,524) (222,639) (7,746,715) - (14,771,878)
Net Cash Used for Capital
and Related Financing Activities (9,855,988) (870,917) 458,062 - (10,268,843)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest Received from Investments 193,814 30,400 - - 224,214
Acquisition of Investment Securities (597,678) (542,159) - - (1,139,837)
Proceeds from Sales of Investments 299,203 - - - 299,203
Net Cash Provided (Used)
by Investing Activities (104,661) (511,759) - - (616,420)
Net (Decrease) Increase in Cash
and Cash Equivalents 64,053 485,511 - - 549,564
Cash and Equivalents:
Beginning of Year 15,960,166 3,577,274 2,736,801 - 22,274,241
End of Year 16,024,219$ 4,062,785$ 2,736,801$ -$ 22,823,805$
RECONCILIATION TO STATEMENT
OF NET POSITION
Cash and Cash Equivalents 9,551,007$ 914,904$ -$ -$ 10,465,911$
Restricted Cash and Cash Equivalents 6,473,212 3,147,881 2,736,801 - 12,357,894
Total Cash and Cash Equivalents 16,024,219$ 4,062,785$ 2,736,801$ -$ 22,823,805$
(Continued)
East Valley Water District
Combining Schedule of Cash Flows - Continued
Year Ended June 30, 2023
86
Water Wastewater
Water
Reclamation Eliminations Total
Reconciliation of Operating Income (Loss) to
Net Cash Provided by Operating Activities
Operating Income (Loss)1,320,974$ 151,757$ (177,857)$ -$ 1,294,874$
Adjustments to Reconcile Operating
Income (Loss) to Net Cash Provided by
Operating Activities:
Depreciation 5,425,456 838,921 - - 6,264,377
Miscellaneous Income/(Expense)49,404 - - - 49,404
CIP Projects Expensed 18,656 - - - 18,656
Change in Assets and Liabilities:
Customer Receivables 1,451,691 509,057 (548,409) - 1,412,339
Inventory (30,281) - - - (30,281)
Prepaids 11,492 2,205 - - 13,697
Deferred Outflow of Resources (2,827,691) (854,656) - - (3,682,347)
Accounts Payable - Supplier 3,162,011 100,232 11,780 - 3,274,023
Salaries & Benefits Payable (32,606) 11,230 73,988 - 52,612
Compensated absences (87,041) 44,744 182,436 - 140,139
Net Pension Liability 5,506,990 1,690,457 - - 7,197,447
Net OPEB Liability 87,139 37,346 - - 124,485
Deferred Inflows of Resources (3,813,926) (663,106) - - (4,477,032)
Other Receivables (231,483) - - - (231,483)
Customer / Developer Deposits 13,917 - - - 13,917
Total Cash Provided
by Operating Activities 10,024,702$ 1,868,187$ (458,062)$ -$ 11,434,827$
NON-CASH INVESTING, CAPITAL, AND
NON-CAPITAL FINANCING ACTIVITIES:
Fair Value Adjustments to Investments 208,616$ 92,130$ -$ -$ 300,746$
-$ -$ 13,349,674$ -$ 13,349,674$
Liabilities, Including Retainage 239,129$ 837,713$ 876,909$ -$ 1,953,751$
Receivable Offset by Debt
Capital Assets Acquired by Assuming
87
88
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2023
Table of Contents
89
Page No.
Statistical Information Section
Financial Trends .................................................................................................. 91-96
These schedules contain information to help the reader understand how the District’s financial
performance and well-being have changed over time.
Changes in Net Position by Component – Last Ten Fiscal Years .................................... 91-92
Operating Revenue by Source – Last Ten Fiscal Years ..................................................... 93
Water Operating Expenses – Last Ten Fiscal Years .......................................................... 94
Wastewater Operating Expenses – Last Ten Fiscal Years ................................................. 95
Water Reclamation Operating Expenses – Last Ten Fiscal Years ....................................... 96
Revenue Capacity .............................................................................................. 97-104
These schedules contain information to help the reader assess the District’s most significant
sources of revenue, water sales, meter charges, wastewater system charges, wastewater
treatment charges, and other charges.
Water Sales and Production – Last Ten Fiscal Years ........................................................ 97
Revenue Rates for Water – Last Ten Fiscal Years ...................................................... 99-100
Revenue Rates for Wastewater – Last Ten Fiscal Years ............................................ 101-102
Active Services by Type – Last Ten Fiscal Years ............................................................. 103
Principal Customers – Current Fiscal Year and Nine Years Ago......................................... 104
Debt Capacity ................................................................................................. 105-106
These schedules present information to help the reader assess the affordability of the District’s
current levels of outstanding debt and the District’s ability to issue additional debt in the future.
Ratio of Outstanding Debt – Last Ten Fiscal Years .......................................................... 105
Debt Service Coverage – Last Ten Fiscal Years............................................................... 106
Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2023
Table of Contents
90
Page No.
Statistical Information Section - Continued
Demographic Information ..................................................................................... 107
These schedules offer demographic indicators to help the reader understand the environment
within which the District’s financial activities take place.
Demographic and Economic Statistics – Last Ten Calendar / Fiscal Years ......................... 107
Operating Information ................................................................................... 108-109
These schedules contain service and infrastructure data to help the reader understand how the
information in the District’s financial report relates to the service provided by the District.
Full-Time Equivalent Employees by Department – Last Ten Fiscal Years ........................... 108
Operating and Capacity Indicators for Water and Wastewater – Last Ten Fiscal Years ....... 109
EAST VALLEY WATER DISTRICT
Changes in Net Position by Component
Last Ten Fiscal Years
91
Year ended June 30,
2014 2015 2016 2017 2018
Change In Net Position
Operating Revenue 32,620,577$ 30,743,445$ 33,024,082$ 37,448,549$ 40,291,125$
Operating Expenses 29,191,176 29,146,339 32,655,921 32,299,587 35,980,099
Operating Income (Loss)3,429,401 1,597,106 368,161 5,148,962 4,311,026
Non-Operating Revenue
(Expenses)
Investment Income 49,846 100,830 146,874 69,237 221,359
Other Income 334,700 800,278 830,806 401,323 258,560
Interest Expense (1,917,676) (1,980,062) (1,843,440) (1,776,684) (1,777,852)
Amortization (99,688) - - - -
Gain (Loss) on
Disposal of Assets (606,085) - - - -
Total Non-Operating
Revenue (Expenses)(2,238,903) (1,078,954) (865,760) (1,306,124) (1,297,933)
Special Item
Abandoned Projects - (2,413,478) - (1,615,241) -
Hazard Mitigation - - - - (155,177)
Capital Contributions 6,369,890 596,940 732,642 2,446,118 523,918
Change in Net Position 7,560,388 (1,298,386) 235,043 4,673,715 3,381,834
Prior Period Adjustment - (7,956,231) - - -
Cumulative Effect of Change
in Accounting Principles - - - - (1,711,803)
Net Position - Beginning 114,509,106 122,069,494 112,814,877 113,049,920 117,723,635
Net Position - Ending 122,069,494$ 112,814,877$ 113,049,920$ 117,723,635$ 119,393,666$
Net Position By Component
Net Investment in
Capital Assets 101,757,787$ 98,091,685$ 103,222,160$ 104,659,796$ 103,210,762$
Restricted 2,274,769 2,322,238 2,276,695 2,847,924 3,334,940
Unrestricted 18,036,938 12,400,954 7,551,065 10,215,915 12,847,964
122,069,494$ 112,814,877$ 113,049,920$ 117,723,635$ 119,393,666$
(Continued)
SOURCE: East Valley Water District - Finance Department
EAST VALLEY WATER DISTRICT
Changes in Net Position by Component - Continued
Last Ten Fiscal Years
92
Year ended June 30,
2019 2020 2021 2022 2023
Change In Net Position
Operating Revenue 39,309,298$ 39,812,912$ 42,236,814$ 43,093,615$ 43,810,012$
Operating Expenses 35,898,073 36,249,650 36,496,064 40,578,341 42,515,136
Operating Income (Loss)3,411,225 3,563,262 5,740,750 2,515,274 1,294,876
Non Operating Revenue
(Expenses)
Investment Income 571,549 524,675 167,499 165,989 352,273
Other Income 307,247 121,983 43,744 (269,768) (37,876)
Interest Expense (1,684,986) (1,579,104) (1,387,113) (1,295,223) (869,397)
Amortization - -
Gain (Loss) on
Disposal of Assets 705,285 - (1,236,600) 1,042,562 30,134
(100,905) (932,446) (2,412,470) (356,440) (524,866)
Special Item
Abandoned Projects - - - - -
Hazard Mitigation - - - - -
Capital Contributions 611,673 9,961,522 877,185 2,826,525 1,922,052
Change in Net Position 3,921,993 12,592,338 4,205,465 4,985,359 2,692,062
Prior Period Adjustment - - - - -
Cumulative Effect of Change
in Accounting Principles - - - - -
Net Position - Beginning 119,393,666 123,315,659 135,907,997 140,113,462 145,098,821
Net Position - Ending 123,315,659$ 135,907,997$ 140,113,462$ 145,098,821$ 147,790,883$
Net Position By Component
Net Investment in
Capital Assets 95,468,735$ 106,708,555$ 114,767,362$ 117,079,071$ 112,909,956$
Restricted 3,460,835 6,659,487 6,435,505 9,076,014 10,761,677
Unrestricted 24,386,089 22,539,955 18,910,595 18,943,736 24,119,250
123,315,659$ 135,907,997$ 140,113,462$ 145,098,821$ 147,790,883$
SOURCE: East Valley Water District - Finance Department
EAST VALLEY WATER DISTRICT
Operating Revenue by Source
Last Ten Fiscal Years
93
Wastewater Wastewater Total
Year Ended Water Meter System Treatment Other Operating
June 30,Sales Charges Charges Charges Charges Revenue
2014 15,351,609$ 4,704,036$ 4,649,212$ 7,197,418$ 718,302$ 32,620,577$
2015 13,505,159 4,874,581 4,531,355 6,907,828 924,522 30,743,445
2016 11,927,523 8,063,077 4,286,594 7,165,655 1,581,233 33,024,082
2017 14,556,339 8,944,652 4,703,439 8,128,030 1,116,089 37,448,549
2018 17,063,891 8,999,756 4,668,923 8,697,671 860,884 40,291,125
2019 15,746,654 9,009,881 4,643,732 8,592,950 1,316,081 39,309,298
2020 16,902,370 9,023,267 4,647,347 8,496,012 743,916 39,812,912
2021 19,305,631 9,217,003 4,705,683 8,456,508 551,989 42,236,814
2022 18,472,876 9,192,297 4,828,526 9,764,357 835,559 43,093,615
2023 17,004,576 9,831,561 5,651,554 10,108,850 1,213,471 43,810,012
SOURCE: East Valley Water District - Finance Department
$-
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
$30,000,000
$35,000,000
$40,000,000
$45,000,000
$50,000,000
Other Charges
Wastewater
Treatement Charges
Wastewater System
Charges
Meter Charges
Water Sales
EAST VALLEY WATER DISTRICT
Water Operating Expenses
Last Ten Fiscal Years
94
Transmission Customer Accts,Total
Year Ended Source of Water &General, & Water Oper
June 30,Supply Pumping Treatment Distribution Admin Expenses
2014 2,875,518$ 992,555$ 1,516,412$ 1,437,831$ 6,397,534$ 13,219,850$
2015 3,025,714 615,147 743,099 2,120,374 6,785,909 13,290,243
2016 2,442,061 696,432 799,947 2,327,185 8,782,957 15,048,582
2017 3,401,062 646,940 750,052 2,222,953 7,696,211 14,717,218
2018 2,595,071 683,296 969,460 2,538,910 9,347,724 16,134,461
2019 2,975,348 585,585 840,623 2,819,288 9,393,555 16,614,399
2020 3,263,403 457,846 891,127 3,460,642 9,414,762 17,487,780
2021 3,617,788 596,586 1,008,129 3,253,175 9,208,176 17,683,854
2022 3,515,262 756,843 1,045,730 3,563,328 12,534,090 21,415,253
2023 3,890,634 1,003,038 1,212,646 4,311,606 10,744,909 21,162,833
SOURCES: East Valley Water District - Customer Service, Finance, and Operations Departments
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Source of Supply Pumping
Water Treatment Transmission & Distribution
Customer Accts, General, & Admin
EAST VALLEY WATER DISTRICT
Wastewater Operating Expenses
Last Ten Fiscal Years
95
Customer Accts,Total
Year Ended Wastewater General, &Wastewater Oper
June 30,Collections Admin Expenses
2014 312,193$ 2,953,997$ 3,266,190$
2015 448,399 3,356,250 3,804,649
2016 407,913 2,752,779 3,160,692
2017 425,944 2,510,920 2,936,864
2018 753,000 3,367,091 4,120,091
2019 700,507 3,309,983 4,010,490
2020 767,448 2,922,949 3,690,397
2021 722,680 3,140,650 3,863,330
2022 587,128 3,113,309 3,700,437
2023 752,489 4,048,730 4,801,219
SOURCES: East Valley Water District - Customer Service and Finance Departments
$0
$1,000,000
$2,000,000
$3,000,000
$4,000,000
$5,000,000
$6,000,000
Wastewater Collections Customer Accts, General, & Admin
EAST VALLEY WATER DISTRICT
Water Reclamation Operating Expenses
Last Ten Fiscal Years
96
Customer Accts,Total
Year Ended Wastewater General, &Water Recl Oper
June 30,Treatment Admin Expenses
2014 7,197,418$ -$ 7,197,418$
2015 6,907,828 - 6,907,828
2016 7,302,389 - 7,302,389
2017 8,128,030 - 8,128,030
2018 8,697,671 - 8,697,671
2019 8,592,950 - 8,592,950
2020 8,496,012 - 8,496,012
2021 8,456,508 - 8,456,508
2022 9,084,061 - 9,084,061
2023 9,601,461 685,246 10,286,707
SOURCES: East Valley Water District - Customer Service and Finance Departments
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
Wastewater Treatment Customer Accts, General, & Admin
EAST VALLEY WATER DISTRICT
Water Sales and Production
Last Ten Fiscal Years
97
Year Ended Water Sales Water Produced
June 30,(Acre Feet)(Acre Feet)
2014 19,910 20,665
2015 17,431 18,494
2016 14,999 16,614
2017 16,223 17,922
2018 18,361 18,997
2019 16,167 17,397
2020 17,037 17,596
2021 18,429 18,784
2022 17,998 18,789
2023 15,341 16,408
SOURCES: East Valley Water District - Finance and Operations Departments
0
5,000
10,000
15,000
20,000
25,000
Water Produced
Water Sales
98
EAST VALLEY WATER DISTRICT
Revenue Rates for Water
Last Ten Fiscal Years
99
Year ended June 30,
2014 2015(1)2016 2017 2018
Tier 1-$1.45 Tier 1-$1.45 Tier 1-$1.63 Tier 1-$1.73
Tier 2-$2.07 Tier 2-$2.07 Tier 2-$2.32 Tier 2-$2.46
Tier 3-$2.89 Tier 3-$2.89 Tier 3-$3.24 Tier 3-$3.44
Year ended June 30,
2014 2015 2016 2017 2018
13.71$ 20.96$ 20.96$ 23.06$ 23.06$
13.71 26.61 26.61 29.27 29.27
20.87 37.92 37.92 41.71 41.71
38.60 66.19 66.19 72.81 72.81
88.48 100.12 100.12 110.13 110.13
163.25 207.54 207.54 228.30 228.30
270.06 365.85 365.85 402.44 402.44
537.09 744.67 744.67 819.14 819.14
857.52 1,366.62 1,366.62 1,503.28 1,503.28
(Continued)
NOTES:
HCF = Hundred Cubic Feet = 748 gallons
(1)On June 1, 2015 the District adopted Water Budget Based Rates.
(2)On January 1, 2020 the District adopted New Water Rates.
(3)On January 1, 2022 the District adopted New Water Rates.
SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions
Water Consumption Rates
1
1 1/2
2
8
3
4
6
(inches)
5/8
3/4
Meter Size
Charge per HCF 1.77$
Water Monthly System Charges
EAST VALLEY WATER DISTRICT
Revenue Rates for Water - Continued
Last Ten Fiscal Years
100
Year ended June 30,
2019 2020(2)2021 2022(3)2023
Tier 1-$1.73 Tier 1-$1.83 Tier 1-$1.83 Tier 1-$1.98 Tier 1-$2.04
Tier 2-$2.46 Tier 2-$2.61 Tier 2-$2.61 Tier 2-$2.54 Tier 2-$2.62
Tier 3-$3.44 Tier 3-$3.64 Tier 3-$3.64 Tier 3-$3.93 Tier 3-$4.05
Year ended June 30,
2019 2020 2021 2022(3)2023
23.06$ 23.06$ 23.06$ 24.01$ 24.74$
29.27 29.27 29.27 30.85 31.78
41.71 41.71 41.71 44.52 45.86
72.81 72.81 72.81 78.69 81.06
110.13 110.13 110.13 119.70 123.30
228.30 228.30 228.30 229.05 235.93
402.44 402.44 402.44 352.07 362.64
819.14 819.14 819.14 693.79 714.61
1,503.28 1,503.28 1,503.28 1,923.98 1,981.70
NOTES:
HCF = Hundred Cubic Feet = 748 gallons
(1)On June 1, 2015 the District adopted Water Budget Based Rates.
(2)On January 1, 2020 the District adopted New Water Rates.
(3)On January 1, 2022 the District adopted New Water Rates.
SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions
Water Consumption Rates
1
1 1/2
2
8
3
4
6
(inches)
5/8
3/4
Charge per HCF
Meter Size
Water Monthly System Charges
EAST VALLEY WATER DISTRICT
Revenue Rates for Wastewater
Last Ten Fiscal Years
101
Year ended June 30,
2014 2015(1)2016 2017 2018
Single-Family Residential (1 to 3 units)
Flat Monthly Charge (per unit)15.36$ 15.36$ 15.36$ 15.36$ 15.36$
Multi-Family Residential (4 or more units)
Flat Monthly Charge (per unit)15.36$ 15.36$ 15.36$ 15.36 N/A
Commercial Non-Residential
Flat Monthly Charge 3.90 3.90 3.90 3.90 3.90
plus,
Charge per HCF 0.55 0.55 0.55 0.55 0.55
Year ended June 30,
2014 2015(1)2016 2017 2018
Residential (Flat Monthly Charge)
Flat Monthly Charge
Residential (1 unit)18.50$ 18.50$ 19.18$ 20.85$ 21.55$
Residential (2 units)N/A N/A N/A N/A N/A
Residential (3 units)N/A N/A N/A N/A N/A
Multi-Family (2 units)37.00 37.00 38.37 41.72 43.10
Multi-Family (3 units)55.50 55.50 57.55 62.58 64.64
Multi-Family (4 or more units)N/A N/A N/A N/A N/A
Commercial
Multi-Family (4+ units)2.40 2.40 1.71 1.90 1.97
Non-Residential 2.40 2.40 3.18 3.42 3.52
plus,
Charge per HCF:
Multi-Family (4+ units)1.25 1.25 1.36 1.48 1.53
Retail 2.10 2.10 2.28 2.47 2.55
Restaurants/Lounges 2.70 2.70 2.93 3.18 3.28
Schools/Churches 1.10 1.10 1.19 1.29 1.33
Governments/Municipal 1.50 1.50 1.63 1.77 1.83
Laundromats 1.50 1.50 1.63 1.77 1.83
Dry Cleaners 2.10 2.10 2.28 2.47 2.55
Convalescent Homes 1.35 1.35 1.46 1.58 1.63
Auto Repair/Svc Stations 1.30 1.30 1.41 1.53 1.58
Car Wash 1.30 1.30 1.41 1.53 1.58
Patton State Hospital N/A N/A N/A N/A N/A
Hotels 2.70 2.70 2.93 3.18 3.28
Ofc Bldgs/Motels 1.50 1.50 1.63 1.77 1.83
Supermarkets 2.70 2.70 2.93 3.18 3.28
NOTES:(Continued)
HCF = Hundred Cubic Feet = 748 gallons
(1)On June 1, 2015 the District adopted Water Budget Based Rates.
(2)
SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions
Starting in May 2022, the District transitioned from rates established by the City of San Bernardino to
rates adopted as the result of a wastewater Cost of Service Analysis for the District's Sterling Natural
Resource Center Water Reclamation Plant.
Wastewater Maintenance Charges
Wastewater Treatment Charges
EAST VALLEY WATER DISTRICT
Revenue Rates for Wastewater - Continued
Last Ten Fiscal Years
102
Year ended June 30,
2019 2020 2021 2022(2)2023
Single-Family Residential (1 to 3 units)
Flat Monthly Charge (per unit)15.36$ 15.36$ 15.36$ 14.25$ 15.25$
Multi-Family Residential (4 or more units)
Flat Monthly Charge (per unit)N/A N/A N/A 13.46 14.41
Commercial Non-Residential
Flat Monthly Charge 3.90 3.90 3.90 10.33 11.06
plus,
Charge per HCF 0.55 0.55 0.55 - -
Year ended June 30,
2019 2020 2021 2022(2)2023
Residential (Flat Monthly Charge)
Flat Monthly Charge
Residential (1 unit)21.55$ 21.55$ 21.55$ 23.37$ 25.01$
Residential (2 units)N/A N/A N/A 23.37 25.01
Residential (3 units)N/A N/A N/A 23.37 25.01
Multi-Family (2 units)43.10 43.10 43.10 20.86 22.33
Multi-Family (3 units)64.64 64.64 64.64 20.86 22.33
Multi-Family (4 or more units)N/A N/A N/A 20.86 22.33
Commercial
Multi-Family (4+ units)1.97 1.97 1.97 N/A N/A
Non-Residential 3.52 3.52 3.52 10.83 11.59
plus,
Charge per HCF:
Multi-Family (4 + units)1.53 1.53 1.53 N/A N/A
Retail 2.55 2.55 2.55 1.31 1.41
Restaurants/Lounges 3.28 3.28 3.28 1.31 4.16
Schools/Churches 1.33 1.33 1.33 1.31 1.41
Governments/Municipal 1.83 1.83 1.83 1.31 1.41
Laundromats 1.83 1.83 1.83 1.99 2.14
Dry Cleaners 2.55 2.55 2.55 1.99 2.14
Convalescent Homes 1.63 1.63 1.63 1.99 2.14
Auto Repair/Svc Stations 1.58 1.58 1.58 1.99 2.14
Car Wash 1.58 1.58 1.58 1.99 1.41
Patton State Hospital N/A N/A N/A 2.36 2.53
Hotels 3.28 3.28 3.28 3.88 4.16
Ofc Bldgs/Motels 1.83 1.83 1.83 3.88 1.41
Supermarkets 3.28 3.28 3.28 1.31 4.16
NOTES:
HCF = Hundred Cubic Feet = 748 gallons
(1)On June 1, 2015 the District adopted Water Budget Based Rates.
(2)
SOURCE: East Valley Water District - Water and Wastewater Rate Resolutions
Wastewater Treatment Charges
Starting in May 2022, the District transitioned from rates established by the City of San Bernardino to
rates adopted as the result of a wastewater Cost of Service Analysis for the District's Sterling Natural
Resource Center Water Reclamation Plant.
Wastewater Maintenance Charges
EAST VALLEY WATER DISTRICT
Active Services by Type
Last Ten Fiscal Years
103
Year Ended Residential Multi-Family To tal
June 30, (1 to 3 units) (4+ units)Commercial Irrigation Fire Svcs Service
2014 18,584 497 1,268 313 1,321 21,983
2015 18,584 497 1,268 313 1,321 21,983
2016 19,500 463 949 275 1,330 22,517
2017 19,526 463 988 275 1,339 22,591
2018 19,526 463 988 275 361 21,613
2019 19,883 474 681 322 252 21,612
2020 19,526 463 988 275 255 21,507
2021 19,526 463 988 275 255 21,507
2022 19,853 463 988 275 255 21,834
2023 19,876 474 715 354 260 21,679
SOURCES: East Valley Water District - Customer Service and Finance Departments
0
5,000
10,000
15,000
20,000
25,000
Residential Multi-Family Commercial Irrigation Fire Svcs
EAST VALLEY WATER DISTRICT
Principal Customers
Current Fiscal Year and Nine Years Ago
104
Water Percentage Water Percentage
Consumed of Total Consumed of Total
Customer (AF)Rank (%)(AF)Rank (%)
San Bernardino City Unified School District 507 1 3.09% 545 2 2.64%
Patton State Hospital 359 2 2.19% 595 1 2.88%
City of Highland 312 3 1.90% 297 4 1.44%
San Manuel Indian Bingo & Casino 309 4 1.88% 208 6 1.01%
Village Lakes Homeowners Association 164 5 1.00%-
East Highlands Ranch 151 6 0.92% 365 3 1.77%
San Manuel Mission Indians 151 7 0.92% 228 5 1.10%
Amusement Industry 142 8 0.87%-
Tuscany Apartment Homes 139 9 0.85% 95 10 0.46%
Victoria Village Apartments 105 10 0.64% 99 9 0.48%
Stubblefield Mobile Home Parks & Offices 154 7 0.75%
Valencia Lea Mobile Home Park 136 8 0.66%
Total - Top 10 2,339 14.26% 2,722 13.19%
Total - Water Produced 16,408 100.00% 20,665 100.00%
SOURCES: East Valley Water District - Customer Service and IT Departments
20142023
EAST VALLEY WATER DISTRICT
Ratio of Outstanding Debt
Last Ten Fiscal Years
105
Fiscal
Year
Revenue
Bonds DWR Loans
Capital
Lease and
Loan
Certificates
of
Participation
Installment
Note
Outstanding
Debt
$ Per
Capita
As a
Share of
Personal
Income
2014 42,195,000$ 7,091,964$ 3,998,560$ -$ -$ $ 53,285,524 561 1.67%
2015 40,930,000 7,071,964 3,671,849 - - 51,673,813 508 1.43%
2016 39,615,000 6,818,565 3,299,108 - - 49,732,673 476 1.30%
2017 38,235,000 6,565,166 7,278,478 - - 52,078,644 510 1.36%
2018 36,800,000 6,721,695 6,392,308 - - 49,914,003 489 1.26%
2019 35,300,000 31,947,551 5,131,238 - - 72,378,789 710 1.72%
2020 33,720,000 69,565,404 4,295,104 - - 107,580,508 1,044 2.30%
2021 33,261,998 132,399,838 3,449,724 - - 169,111,561 1,642 3.32%
2022 32,288,904 145,368,048 2,582,889 - - 180,239,841 1,750 *
2023 30,923,365 161,169,730 1,719,375 - - 193,812,470 1,864 *
NOTE:
* This data was not developed in the format required for this fiscal year.
SOURCE: East Valley Water District - Finance Department
$0
$25,000,000
$50,000,000
$75,000,000
$100,000,000
$125,000,000
$150,000,000
$175,000,000
$200,000,000
Revenue Bonds DWR Loans Capital Lease and Loan
Certificates of Participation Installment Note
EAST VALLEY WATER DISTRICT
Debt Service Coverage
Last Ten Fiscal Years
106
Gross Operating Net Available
Revenue (1)Expenses(2)Revenue Principal(3)Interest Total
27,397,559$ 13,219,850$ 14,177,709$ 1,167,718$ 1,840,671$ $3,008,389 4.71 %
20,662,750 12,915,690 7,747,060 1,546,490 1,813,348 3,359,838 2.31
22,543,107 15,048,582 7,494,525 1,851,139 1,718,658 3,569,797 2.10
25,257,709 14,717,219 10,540,490 1,926,956 1,653,322 3,580,278 2.94
27,537,072 16,134,461 11,402,611 2,479,570 1,584,820 4,064,390 2.81
27,071,082 16,614,399 10,456,683 2,904,466 1,593,181 4,497,647 2.32
27,466,707 17,487,780 9,978,927 2,564,310 1,456,842 4,021,152 2.48
29,738,333 17,638,854 12,099,479 4,703,778 1,104,438 5,808,216 2.08
30,465,196 21,415,253 9,049,943 2,100,233 957,953 3,058,186 2.96
29,330,516 21,162,833 8,167,683 2,141,913 917,000 3,058,913 2.67
Gross Operating Net Available
Revenue (1)Expenses(2)Revenue Principal Interest Total
2014 11,974,164$ 10,463,608$ 1,510,556$ 85,000$ 184,621$ $ 269,621 5.60 %
2015 11,578,742 10,606,751 971,991 85,000 229,725 314,725 3.09
2016 12,095,372 10,463,081 1,632,291 90,000 225,775 315,775 5.17
2017 13,134,564 11,064,894 2,069,670 95,000 221,625 316,625 6.54
2018 13,758,976 12,817,762 941,214 95,000 217,350 312,350 3.01
2019 14,433,970 12,603,440 1,830,530 100,000 212,475 312,475 5.86
2020 22,954,385 12,186,049 10,768,336 105,000 207,350 312,350 34.48
2021 13,586,909 12,319,838 1,267,071 110,000 158,476 268,476 4.72
2022 16,697,201 12,784,498 3,912,703 170,000 100,145 270,145 14.48
2023 6,274,931 4,801,219 1,473,712 175,000 99,315 274,315 5.37
NOTES:
(1)
(2)Operating expenses, less depreciation, for the utility fund.
(3)Excludes Debt Service for Assessment Districts' Arroyo Verde and Eastwood Farms.
SOURCE: East Valley Water District - Finance Department
2021
2022
2023
Wastewater Department
Coverage
2014
2015
2016
2017
2018
2019
2020
Year Ended
June 30,
Debt Service
Water Department
Year Ended
Gross revenue includes all operating revenue, interest income, other non-operating revenue and connection
fees from the utility fund.
Coverage
Debt Service
June 30,
EAST VALLEY WATER DISTRICT
Demographics and Economic Statistics
Last Ten Calendar / Fiscal Years
107
Personal Personal
Income Income
District Unemployment Population (thousands Per Capita
Population (3)(4)Rate (1)(3)(2)+of dollars)(2)+(dollars)(2)+
2014 95,000 8.9% 2,095,533 70,425,945 33,608
2015 101,733 7.2% 2,110,852 74,773,589 35,423
2016 104,457 6.0% 2,126,539 77,868,801 36,618
2017 102,208 5.5% 2,144,961 80,514,585 37,537
2018 102,000 4.4% 2,160,049 83,915,091 38,849
2019 102,000 4.0% 2,170,992 89,559,909 41,253
2020 103,000 6.4% 2,182,740 99,313,293 45,499
2021 103,000 9.0% 2,194,710 108,623,799 49,493
2022 104,000 5.4%***
2023 104,000 4.2%***
NOTES:
+This data was revised in 2021(2)
*This data was not developed in the format required for this fiscal year.
SOURCES:
(1)U.S. Department of Labor, Bureau of Labor Statistics (BLS)
Census Bureau midyear population estimates.
(2)Bureau of Economic Analysis (BEA)
Computed using midyear population estimates.
(3)Fiscal Year ends on June 30 of the year that is shown.
(4)East Valley Water District - Finance Department
June 30,
County of San Bernardino
Year Ended
EAST VALLEY WATER DISTRICT
Full-Time Equivalent Employees by Department
Last Ten Fiscal Years
108
District Engineering &Water
Administration Maintenance Operations Reclamation(1)Total
25.5 29 11 0 65.5*
27.5 28.5 11 0 67*
27 28 13 0 68*
27 29 12 0 68*
26.5 29 13 0 68.5*
27.5 32 11 0 70.5*
26 30 11 0 67
25 30 11 0 66
26 30 11 9 76
26 30 11 9 76
NOTES:
*Includes Part-Time Employees (PTEs)
(1)Water Reclamation program started in FY 2021-22
SOURCES: East Valley Water District - Finance and Human Resources Departments
Year Ended
June 30,
2020
2021
2023
2018
2014
2015
2016
2017
2019
2022
0
10
20
30
40
50
60
70
80
District Administration Engineering & Maintenance
Operations Water Reclamation
EAST VALLEY WATER DISTRICT
Operating and Capacity Indicators for Water and Wastewater
Last Ten Fiscal Years
109
Annual Average
Miles of Number of Production Production
Water Main Fire Hydrants (MG)(MGD)
2014 297 2,976 6,488 18
2015 316 3,005 5,680 16
2016 316 3,005 4,887 13
2017 316 3,005 5,286 14
2018 300 3,018 5,983 16
2019 300 3,025 5,268 14
2020 300 3,025 5,552 15
2021 300 3,029 6,121 17
2022 300 3,043 6,122 17
2023 300 3,048 5,347 15
Annual Daily
Miles of Service Sewerage Sewerage
Wastewater Connections (MG)(MGD)
2014 223 19,504 2,595.08 7.11
2015 224 19,544 2,271.96 6.22
2016 224 19,572 2,167.71 5.94
2017 260 20,290 2,175.40 5.96
2018 225 20,581 2,149.85 5.89
2019 214 20,563 2,091.45 5.73
2020 214 19,679 2,220.61 6.08
2021 214 19,686 2,220.61 6.08
2022 220 19,766 2,448.97 6.71
2023 220 19,831 2,138.63 5.86
SOURCE: East Valley Water District - Engineering and Finance Departments
Water System
Wastewater System
Year Ended
June 30,
Year Ended
June 30,
110
EAST VALLEY WATER DISTRICT
Capacity Charge Funds
Year Ended June 30, 2023
111
Capacity Charge Funds
Government Code Section 66013 requires local agencies that collect capacity charges to deposit and account for these
fees in a separate capital facilities fund. In addition, local agencies are required to annually provide the information in
this report to the public upon request. Government Code Section 66013 (b) (3) defines "Capacity charge" means a
charge for public facilities at the time the charge is imposed or charges for new public facilities to be acquired or
constructed in the future that are of proportional benefit to the person or property being charged, including supply or
capacity contracts for rights or entitlements, real property interests, and entitlements and other rights of the local
agency involving capital expense related to its use of the use of existing or new public facilities. "
Government Code Section 66013 (d) outlines the reporting requirements on the capital facilities funds and
expenditures. Government Code Section 66013 (f) (2) exempts capacity charges that are used to pay existing debt
service from the reporting requirements of Section 66013 (d). Two of the District's capacity charges are used to pay
existing debt service; therefore, they are exempt from the reporting requirements. For the purpose of enhancing
transparency, the District has provided the reporting information on its capacity charges that are exempt from Section
66013 (d).
The District has the following capacity charge funds:
Water Capacity Fee Fund. This fund collects System Capacity Charges for new water service connections to pay
for proportionate shares of the District equipment replacements and facility improvements.
Wastewater Capacity Fee Fund. This fund collects a fee for the capacity used by new wastewater connections
and the funds are used to pay facilities and to help ensure the wastewater collection system can contain additional
wastewater flows from new customers.
Water Reclamation Capacity Fee Fund. This fund collects fees for the expansion of the Sterling Natural Resource
Center to treat the flows generated by new development.
EAST VALLEY WATER DISTRICT
Capacity Charge Funds
Year Ended June 30, 2023
112
A summary of changes in Water Fund Capacity Fees collected for the year ended June 30, 2023 is as follows:
Beginning of End of
Categories Year Contributions Usage Year
Storage 265,338$ $ 94,413 $ - $ 359,751
Treatment 845,165 28,892 - 874,057
Supply 482,841 42,822 - 525,663
Trans & Distribution 1,323,394 454,431 - 1,777,825
General 189,280 25,614 - 214,894
East Treatment Plant 454,160 321,229 - 775,389
3,560,178$ 967,401$ -$ 4,527,579$
A summary of Projects Funded by Capacity Fees for the year ended June 30, 2023:
Categories CIP Project*
FY 2022-23
Expended
% Funded by
Capacity
Total Capacity
Fees Usage
Storage -$ 0%-$
Treatment
Supply
Trans & Distribution
General
New Treatment Plant
-$ -$
Note: * The District did not have any CIP projects utilizing Capacity Fee funds for the year ended June 30, 2023.
EAST VALLEY WATER DISTRICT
Capacity Charge Funds
Year Ended June 30, 2023
113
A summary of changes in Wastewater Fund Capacity Fees collected for the year ended June 30, 2023 is as follows:
Beginning of End of
Categories Year Contributions Usage Year
Collection $ 1,821,985 $ 156,513 $ - $ 1,978,498
General 281,356 22,782 - 304,138
Greenspot Main 399,412 176,145 - 575,557
5th Street Main 158,728 70,009 - 228,737
Lynwood Main 39,859 17,592 - 57,451
2,701,340$ 443,041$ -$ 3,144,381$
A summary Project Funded by Capacity Fees for the year ended June 30, 2023:
Categories CIP Project
FY 2022-23
Expended
% Funded by
Capacity
Total Capacity
Fees Usage
Collection -$ 0%-$
Transmission -
Recharge -
Operations -
-$ -$
EAST VALLEY WATER DISTRICT
Capacity Charge Funds
Year Ended June 30, 2023
114
A summary of changes in Water Reclamation Fund Capacity Fees collected for the year ended June 30, 2023 is as
follows:
Beginning of End of
Categories Year Contributions Usage Year
Treatment 2,736,801 271,721 - 3,008,522
2,736,801$ 271,721$ -$ 3,008,522$
A summary Project Funded by Capacity Fees for the year ended June 30, 2023:
Categories CIP Project
FY 2022-23
Expended
% Funded by
Capacity
Total Capacity
Fees Usage
Treatment -$ 0%-$
-$ -$
Agenda Item
#2
October 10, 20231
Meeting Date: October 10, 2023
Agenda Item #2
Informational Item
8
9
3
Regular Meeting
TO: Committee Members
FROM: Chief Financial Officer
SUBJECT: Review Resolution 2023.15 - Updating Water Capacity Fees
RECOMMENDATION
This agenda item is for informational purposes only, no action is required.
BACKGROUND / ANALYSIS
The District periodically reviews fees to ensure they are consistent with the policies of
the District. At the November 13, 2019 regular Board Meeting, IB Consulting presented
their 2019 Water and Wastewater Capacity Fee Study with proposed adjustments to
District capacity fees charged to new development. The proposed fees were adopted
and became effective January 1, 2020. Capacity fees are for new meter connections
only and ensures new development pays for its' fair share to connect to the water
system.
Since the fee update almost four years ago, the District has finished the AMI
implementation for small meters, and has been systematically replacing large meters,
defined as meters 2” in diameter or greater. The large replacement meters differ from
the legacy meters in that they utilize Ultrasonic technology to gather meter flow data.
This technology has fewer moving parts internally, resulting in decreased head loss
through the meter, and therefore allowing a greater “gallons per minute” volume
capability (capacity ratio).
The greater flow capability of the new large meters, which is significant, invalidates flow
assumptions used to allocate costs based on meter size and the potential demand
placed on the District’s water system calculated in the 2019 Capacity Fee Study. It was
therefore necessary for the District to request that IB Consulting revise their
calculations from the 2019 study to account for the increased flow capacity for new
meters being used by the District. IB Consulting has completed their revised
calculations and issued a Technical Memorandum with proposed adjustments to the
capacity fees calculated in 2019. The adjusted fees for all meter sizes were then
updated for Construction Cost Index increases that have occurred since 2019.
It is incumbent on the District to ensure that rates/fees cover reasonable costs
associated with providing a service. Updating the capacity fees to accommodate the
higher flow capacities through the newer and more reliable meters will address the
added capacity each meter now allows; insuring developers are paying their fair share
Agenda Item
#2
October 10, 20232
Meeting Date: October 10, 2023
Agenda Item #2
Informational Item
8
9
3
for the higher volumes to meet their project needs. It is important to note that this is
not a full capacity fee study as adjustments being proposed only address the increase
flow rates of meters 2 inches and larger, and adjustments for Construction Cost Index
increases. A comprehensive capacity fee study, which considers the types and cost of
new facilities to accommodate new development, will be started in calendar year 2024,
after updates to the Water Master Plan are completed.
AGENCY GOALS AND OBJECTIVES
IV - Promote Planning, Maintenance and Preservation of District Resources
B. Enhance Planning Efforts that Respond to Future Demands
C. Dedicate Efforts Toward System Maintenance and Modernization
FISCAL IMPACT
There is no fiscal impact associated with this agenda item.
Respectfully submitted:
________________
Brian Tompkins
Chief Financial Officer
ATTACHMENTS
1. Resolution 2023.15
2. Exhibit A - Schedule of Water and Wastewater Rates and Charges
3. IB Consulting 2019 Capacity Fee Study
4. IB Consulting 2023 Technical Memo
5. Public Hearing Notice
East Valley Water District
Resolution 2023.15
Page 1 of 3
8
7
9
RESOLUTION 2023.15
A RESOLUTION OF THE BOARD OF DIRECTORS OF
THE EAST VALLEY WATER DISTRICT
ESTABLISHING A SCHEDULE OF RATES AND CHARGES RELATED TO THE
PROVISION OF WATER AND WASTEWATER SERVICE AND SUPERSEDING
RESOLUTION 2023.05
WHEREAS, East Valley Water District (“District”) is a county water district organized
and operating pursuant to California Water Code Section 30000 et seq.; and
WHEREAS, pursuant to applicable law, including but not limited to Water Code Sections
31007 and 31025, the District’s Board of Directors is authorized to adopt by resolution such rates
and charges for incidental services related to the provision of water service and wastewater service
by the District to implement the rules and regulations set forth in District Ordinance No. 403 and
404, and to yield an amount sufficient to pay for the services provided to District ratepayers and
the regulatory costs incurred by the District in providing those services; and
WHEREAS, Ordinances 403 and 404 provide that Rates and Charges, may be changed
from time to time or new rates and charges may be established by resolution of the Board of
Directors; and
WHEREAS, Section 21080(b) (8) of the Public Resources Code provides that the
establishment, modification, structuring, restructuring or approval of rates, tolls, fares, or other
charges by public agencies are exempt from the requirements of the California Environmental
Quality Act (CEQA) provided that certain findings are made specifying the basis for the claim of
exemption; and
WHEREAS, the District, in accordance with the requirements of Article XIIID of the
Constitution of the State of California, has established rates and fees for property related services
including water and wastewater treatment; and
WHEREAS, the Board of Directors of the District deems it advisable and finds that it
would be in the best interest of the District to amend or establish certain fees and charges,
consistent with applicable constitutional and statutory requirements; and
WHEREAS, Article XIIIC Section 1 of the Constitution of the State of California, excepts
certain levies, fees and charges from the definition of “tax” thereby exempting such levies, fees
and charges from the procedural requirements established by Article XIIID of the California
Constitution; and
WHEREAS, the District now wishes to establish fees and charges incidental and related to
the provision of services for water and wastewater treatment, but which fees and charges are not
for property related services as defined by Article XIIID of the Constitution of the State of
California and which fees and charges may be established by resolution of the Board of Directors
of the District;
East Valley Water District
Resolution 2023.15
Page 2 of 3
8
7
9
NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the District as
follows:
Section 1. It is hereby found and determined that the proposed changes to the Schedule of
Water and Wastewater Rates and Charges as set forth in Exhibit “A” are within the purposes set
forth in Section 21080(b) of the Public Resources Code, and therefore, that such changes are
exempt from CEQA.
Section 2. It is hereby found and determined that the capacity fees being increased hereby
do not exceed the estimated reasonable cost of providing the service for which they are imposed
and that said fees do not constitute a tax pursuant to Article XIIIC Section 1(e) of the California
Constitution.
Section 3. That the Secretary is hereby ordered and directed to post a certified copy of this
Resolution in a public place within the District.
This Resolution shall take effect as of the 11th day of October 2023.
ADOPTED this 11th day of October 2023.
ROLL CALL:
Ayes:
Noes:
Absent:
Abstain:
Phillip R. Goodrich
Board President
East Valley Water District
Resolution 2023.15
Page 3 of 3
8
7
9
ATTEST:
Michael Moore
Secretary, Board of Directors
October 11, 2023
I HEREBY CERTIFY that the foregoing is a full, true and correct copy of Resolution 2023.15
adopted by the Board of Directors of East Valley Water District at its Regular Meeting held
October 11, 2023.
Michael Moore
Secretary, Board of Directors
EXHIBIT “A ”
EAST VALLEY WATER DISTRICT SCHEDULE O F
WATER AND WASTEWATER
RATES AND CHARGES
UPDATED OCTOBER 11, 2023
i
Table of Contents
Section 1: Water Service Charges ................................................................... 4
Monthly Water System Charge ..................................................................... 4
Commodity Charges: Potable Water ............................................................ 4
Private Fire Protection Service ..................................................................... 5
1. Commercial Standby Charge ......................................................................... 5
2. Fire Hydrant Flow Test Fee (per fire hydrant) ................................................. 5
Temporary Water Service Connection .......................................................... 6
Monthly Service Charge .................................................................................. 6
1. Commodity Charge ....................................................................................... 6
2. Meter Deposit ............................................................................................... 6
3. Temporary Service Meter Availability Charge (for reading) .............................. 6
4. Unauthorized Use of Water Charge ................................................................ 6
New Account Fees for Water Services .......................................................... 7
1. Security Deposit ........................................................................................... 7
2. Service Initiation Charge ............................................................................... 7
Miscellaneous Water Service Charges and Fees ........................................... 7
1. AMI Opt-Out Fee .......................................................................................... 7
2. Delinquency Charge ...................................................................................... 7
3. Disconnection Notice Charge ......................................................................... 7
4. Meter Test Charge ........................................................................................ 7
5. Returned Payment Fee ................................................................................. 8
6. Service Reconnect Charge (after hours) ......................................................... 8
7. Service Reconnect Charge (business hours) ................................................... 8
Cross-Connection Control ............................................................................. 9
1. Backflow Installation Fee .............................................................................. 9
2. Backflow Inspection Fee (per inspection) ....................................................... 9
3. Initial Backflow Compliance Test (per device) ................................................. 9
ii
4. Backflow Annual Administration Fee (per device) ............................................ 9
5. Annual Backflow Compliance Test (per device) ............................................... 9
Section 2: Wastewater Service Charges ........................................................ 10
Monthly Wastewater Charge - Current ....................................................... 10
Collection Charges ........................................................................................ 10
Treatment Charges ....................................................................................... 11
Wastewater Charge - SNRC ........................................................................ 12
Section 3: Developer Services ....................................................................... 14
Water Capacity and Connection Fees ......................................................... 14
Water Capacity Fees ..................................................................................... 14
Water Connection Fees ................................................................................. 14
Service Installation Benchmark Costs ......................................................... 15
Wastewater Connection Fees ..................................................................... 16
Fire Service Connection Charges ................................................................ 16
Developer Services’ Charges and Fees ....................................................... 17
1. Availability Letter ........................................................................................ 17
2. Construction Inspection Charge (per day or actual cost) ............................... 17
3. Development Agreement (per agreement or actual cost) .............................. 17
4. Development and Engineering Research Fee ($95 per hr; 4-hr min) .............. 17
5. Development Meeting Fee ........................................................................... 18
6. Easement/Quitclaim Processing (per easement) ........................................... 18
7. Fire Hydrant Installation Charge (actual cost or 5% of estimate) ................... 18
8. General Water/Sewer Service Inquiry .......................................................... 18
9. New Construction Chlorination and Flushing Fee ($355 min to actual cost) .... 18
10. Sewer Manhole and Valve Can Deposit ........................................................ 18
11. Special Facility Charge ................................................................................ 19
12. Water Main Extension Charge ...................................................................... 19
13. Water Quality Sampling Fee (per sample) .................................................... 19
14. Water/Sewer Plan Checking Fee (per sheet) ................................................. 19
15. Water System Design Charge ...................................................................... 19
iii
16. Will Serve Letter ......................................................................................... 20
Section 4: Pretreatment Program ................................................................. 21
Penalties for Enforcement Response Plan Discharge Violations ................ 21
Penalties for Enforcement Response Plan Monitoring Violations .............. 22
Penalties for Enforcement Response Plan Reporting Violations ................ 23
Penalties for Enforcement Response Plan Permit Violations ..................... 24
Penalties for Enforcement Response Plan Miscellaneous Violations ......... 26
History of Revisions ........................................................................................ 27
4
Section 1: Water Service Charges
Monthly Water System Charge
The water system charge is the monthly availability charge applicable to all metered water
services, and shall apply whether or not premises served by the meter are occupied. The
charges, which vary by meter size, are established at the amounts listed in the table
below.
7/1/2016 1/1/2022 1/1/2023 1/1/2024
5/8"23.06$ 24.01$ 24.74$ 25.49$
3/4"29.27$ 30.85$ 31.78$ 32.74$
1"41.71$ 44.52$ 45.86$ 47.24$
1 1/2" 72.81$ 78.69$ 81.06$ 83.50$
2"110.13$ 119.70$ 123.30$ 127.00$
3"228.30$ 229.05$ 235.93$ 243.01$
4"402.44$ 352.07$ 362.64$ 373.52$
6"819.14$ 693.79$ 714.61$ 736.05$
8" 1,503.28$ 1,923.98$ 1,981.70$ 2,041.16$
METER
SIZE
RATE EFFECTIVE DATE
Commodity Charges: Potable Water
Commodity Charges are billed on a per unit basis for water consumption registered by
the water service meter. One unit is 100 cubic feet (HCF) of water, which is equal to 748
gallons.
TIERS 1/1/2020 1/1/2022 1/1/2023 1/1/2024
Tier 1 - Indoor Use $ 1.83 $ 1.98 $ 2.04 $ 2.11
Tier 2 - Outdoor Use $ 2.61 $ 2.54 $ 2.62 $ 2.70
Tier 3 - Inefficient Use $ 3.64 $ 3.93 $ 4.05 $ 4.18
RATE EFFECTIVE DATE
5
The District has three price tiers with increasing rates per unit. The number of units a
customer is billed in each tier is determined by their unique water budget. See Section
10 of the District’s Water Regulation and Service Ordinance for an explanation of water
budgets.
Private Fire Protection Service
1. Commercial Standby Charge
The fire service standby charge is the monthly charge assessed per inch diameter of
the District fire service meter. Water use through this service is limited to emergency
fire requirements only.
RATE EFFECTIVE DATE
7/1/2016
1"8.78$
1 1/2"13.18$
2"17.57$
3"26.35$
4"35.14$
6"52.70$
8"70.27$
10"87.84$
METER
SIZE
2. Fire Hydrant Flow Test Fee (per fire hydrant)
The fire flow test charge is a flat rate established to cover the District’s time and effort
for testing parts of the water system to obtain fire flow test data and calculate results
as requested. The District will charge a one-time fee of $270 to administer fire flow
tests.
6
Temporary Water Service Connection
A temporary service is available through the use of a fire hydrant. A customer deposit for
the temporary service will be required, and all other applicable service charges shall apply.
Monthly Service Charge
Refer to the schedule of Monthly Water System Charges for three inch (3”) meters.
1. Commodity Charge
Commodity charges for temporary services shall be billed at the Tier 3 rates based on
the Potable Water Commodity Rates. When available, and feasible, recycled water
shall be used for temporary construction uses.
The Commodity Charge shall be as follows:
AREA RATE / 100 CUBIC FEET
Potable Tier 3 Rate
2. Meter Deposit
A deposit equal to the replacement cost of the construction meter shall be collected
at the time of service application. Currently, the replacement cost is estimated to be
$2,700. The deposit will be applied to the closing bill and any remaining amount
refunded to the customer. Lost meters will result in forfeiture of the deposit.
3. Temporary Service Meter Availability Charge (for reading)
If a hydrant/construction meter is not available for a monthly reading as prescribed
by the District, a fee of $100 will be charged for each month the meter is not read in
order to cover the cost of correcting billing records.
4. Unauthorized Use of Water Charge
The unauthorized use of water charge shall be charged to any person, organization
or agency for each unauthorized use of District water or for tampering in any manner
with any meter belonging to the District where this tampering shall affect the accuracy
of such meter. The unauthorized use of water charge is hereby established at the rate
of $500 for a first occurrence and $1,000 for each subsequent occurrence.
7
New Account Fees for Water Services
The following fees are applicable to all requests for new service, or transfer of an existing
account to a new location:
1. Security Deposit
A deposit of $150 will be required until a one-year payment history, with fewer than
two delinquencies, has been established. The deposit insures payment of minimum
District charges.
2. Service Initiation Charge
The service initiation charge is a non-refundable charge of $35 per account, which
covers the reasonable District costs for initiating water service.
Miscellaneous Water Service Charges and Fees
1. AMI Opt-Out Fee
This fee covers the cost to manually read the meter and will be charged when a
customer requests to Opt-Out; that the District not install an Automated Metering
Infrastructure (AMI) meter information unit to serve their property.
2. Delinquency Charge
Rates and charges which are not paid on or before the due dates shall be subject to
interest charges. Interest will be calculated at a rate of one and one-half percent (1
½%) on all amounts that remain unpaid at the end of each billing cycle.
3. Disconnection Notice Charge
The disconnect notice charge is the charge which covers reasonable District costs to
notify customers that their water service is subject to impending termination.
4. Meter Test Charge
The meter test charge is the charge which covers the District costs for removing,
bench testing, and reinstalling the water meter to be tested.
8
5. Returned Payment Fee
A returned payment charge is a charge which covers the reasonable administrative
cost and banking charges for processing a returned check, or to respond to a disputed
charge where a payment card was fraudulently used to make payment on an account.
6. Service Reconnect Charge (after hours)
The service reconnect charge is the charge which covers the reasonable District costs
for disconnection and reconnection during non-business hours, of service connections
which are in violation of the provisions contained herein.
7. Service Reconnect Charge (business hours)
The service reconnect charge is the charge which covers the reasonable District costs
for disconnection and reconnection during regular business hours, of service
connections which are in violation of the provisions contained herein.
Summary of charges/fees for Miscellaneous Water Service:
CHARGE OR FEE NAME CHARGE/FEE
AMI Opt-Out Fee $13 (per month)
Delinquency Charge 1.5%
Disconnection Notice Charge $30
Fire Hydrant Flow Test Fee $270 (per fire hydrant)
Meter Deposit $2,700
Meter Test Charge $65
Returned Payment Fee $25
Service Initiation Charge $35 (per account)
Service Reconnect Charge (after hours)$150
Service Reconnect Charge (business hours)$50
Temporary Service Meter Availability Charge
(for reading)$100
Unauthorized Use of Water Charge $500 (first occurrence)
Unauthorized Use of Water Charge $1,000 (each subsequent occurrence)
9
Cross-Connection Control
In order to prevent water from flowing backward into the District’s water distribution
system, a backflow device must be installed by all commercial/irrigation and multi-family
customers with four (4) or more units serviced.
All backflow devices must be inspected upon installation and tested annually for
compliance. Compliance testing may be performed by a certified backflow tester and
results shall be submitted to the District.
Installation of new backflow prevention assemblies are typically completed by the owner’s
contractor, if staff performs the installation, it will be billed at actual cost.
1. Backflow Installation Fee
The charge for installation will be based on actual cost to the customer, and will be
billed accordingly.
2. Backflow Inspection Fee (per inspection)
A fee of $145 will be charged for each standard backflow inspection of newly installed
backflow prevention devices, in accordance with District Standards, and inspected by
District staff.
3. Initial Backflow Compliance Test (per device)
A fee of $60 will be charged to the customer for the initial backflow compliance test
performed by certified District staff.
4. Backflow Annual Administration Fee (per device)
The District shall appoint at least one person trained in cross-connection control to
administer and ensure all District standards are met. This backflow annual
administration fee will be assessed annually.
5. Annual Backflow Compliance Test (per device)
A fee of $5 per month will be charged to the customer when the annual backflow
compliance test is performed by certified District staff. The customer will only be billed
as a $60 lump sum when District standards regarding the inspection, testing, and
maintenance of customer-owned backflow assemblies are not followed. See Section
9 of the District’s Water Regulation and Service Ordinance for an explanation of
Inspection, Testing and Maintenance.
10
Summary of charges/fees for Cross-Connection Control:
CHARGE OR FEE NAME CHARGE / FEE
Backflow Installation Fee actual cost
Backflow Inspection Fee $145 (per inspection)
Initial Backflow Compliance Test $60 (per device)
Annual Backflow Administration Fee $15 (per device)
Annual Backflow Compliance Test $60 (per device)
Section 2: Wastewater Service Charges
Monthly Wastewater Charge - Current
Collection Charges
Collection charges were established to maintain the District's wastewater collection lines.
A. Residential Customers (1 – 3 units)
The collection charge for residential customers is a monthly fixed charge.
CUSTOMER CLASS MONTHLY CHARGE
Residential 15.36$
B. Commercial Customers
The collection charges for commercial customers include a small fixed charge plus a
volumetric charge (water usage).
CUSTOMER CLASS MONTHLY FIXED CHARGE
Commercial/Multi-Family 3.90$
Volumetric Charge per hundred cubic feet (HCF) of water used:
11
COMMERCIAL CUSTOMER TYPE CHARGE PER HCF
Multi-Family (4 or more units, Mobile Home Park)0.55$
Commercial/Retail (Non-Office, Bakery, Market)0.55$
Restaurant/Lounge 0.55$
Laundromat 0.55$
Dry Cleaner 0.55$
School/Church (Daycare, Nursery School)0.55$
Office Building/Motel (without a restroom, Municipality)0.55$
Convalescent Home 0.55$
Treatment Charges
The District pays treatment charges established by the City of San Bernardino for the
operation and maintenance of their wastewater treatment facilities. Any future increases
made by the City over the next five years following the previous public hearing, held on
January 25, 2017, may be automatically passed through and incorporated herein by this
reference, by action of the District’s Board of Directors to the extent authorized by
Government Code Section 53756 and any other applicable provision of law.
A. Residential Customers
Treatment charges for residential customers are a monthly fixed charge.
RATE EFFECTIVE DATE
7/1/2017
Residential 21.55$
Multi-Family (2 Units)43.10$
Multi-Family (3 Units)64.64$
CUSTOMER CLASS
B. Commercial Customers
Treatment charges for commercial customers include a small fixed plus a volumetric
charge (water usage) which varies depending on the nature of the commercial entity.
Fixed Charges:
7/1/2017
Multi-Family (4+ Units), Mobile Home Parks 1.97$
Non-Residential Customer Classes 3.52$
CUSTOMER CLASS RATE EFFECTIVE DATE
12
Volumetric Charges (per HCF):
7/1/2017
Multi-Family (4+ Units), Mobile Home Parks 1.53$
Commercial / Retail 2.55$
Restaurants / Lounges 3.28$
Laundromats 1.83$
Dry Cleaners 2.55$
Schools / Churches 1.33$
Governments / Municipal 1.83$
Convalescent Homes 1.63$
Hotels (with Restaurants)3.28$
Offices Buildings / Motels 1.83$
Auto Repair / Service Station 1.58$
Car Wash 1.58$
RATE EFFECTIVE DATECUSTOMER CLASS
Wastewater Charge - SNRC
The commencement of operations at the District’s new Sterling Natural Resource Center
Water Reclamation Plant will require that the District transition from charging rates
established by the City of San Bernardino, to rates that were adopted as the result of a
wastewater Cost of Service Analysis conducted on District operations and facilities.
Wastewater charges consist of both a Collection (System) component and a treatment
component, and includes both fixed charges, and charges based on water usage. An
explanation of how these charges apply to different customer classes is explained below.
A. Residential Customers
The collection and treatment charges for residential customers is a monthly fixed
charge for each dwelling unit. Accounts with 1-3 dwelling units are classified as single-
family residential customers; accounts with 4 or more dwelling units are classified as
multi-family residential customers.
13
Collection Treatment Collection Treatment Collection Treatment
Single-Family Residential
Fixed Monthly Charges 14.25$ 23.37$ 15.25$ 25.01$ 16.32$ 26.77$
Multi-Family Residential
Fixed Monthly Charges 13.46$ 20.86$ 14.41$ 22.33$ 15.42$ 23.90$
RATE EFFECTIVE DATE
1/1/2023 1/1/20245/1/2022
B. Commercial / Non-Residential Customers
The collection and treatment charges for non-residential customers consist of monthly
fixed charges, assessed per account, and a volumetric charge assessed for each unit
of water (HCF) used for the account during the billing period. The volumetric charge
varies based on the strength/concentration factors of the wastewater discharged by
commercial customers. Customers are assigned to a strength category based on
industry standards.
Fixed Monthly Charges:
Collection Treatment Collection Treatment Collection Treatment
10.33$ 10.83$ 11.06$ 11.59$ 11.84$ 12.41$
RATE EFFECTIVE DATE
5/1/2022 1/1/2023 1/1/2024
Volumetric Charges per HCF of Water Usage:
Collection Treatment Collection Treatment Collection Treatment
Low Strength Dischargers 0.35$ 0.96$ 0.38$ 1.03$ 0.41$ 1.11$
Medium Strength Dischargers 0.46$ 1.53$ 0.50$ 1.64$ 0.54$ 1.76$
High Strength Dischargers 0.46$ 3.42$ 0.50$ 3.66$ 0.54$ 3.92$
Patton State Hospital 0.57$ 1.79$ 0.61$ 1.92$ 0.66$ 2.06$
RATE EFFECTIVE DATE
5/1/2022 1/1/2023 1/1/2024
14
Section 3: Developer Services
Water Capacity and Connection Fees
Water Capacity Fees
A “Capacity Charge” is defined within GC 66013 as a charge for public facilities in
existence at the time a charge is imposed or charges for new facilities to be constructed
in the future that is of benefit to the person or property being charged. Capacity fees
ensure new development pays its fair share to connect to the system and does not cause
additional burdens to current customers. Capital and infrastructure costs required to meet
new demand/connections should be paid by those creating the cost to be incurred.
On July 1 of each year Water Capacity Charges will automatically increase in proportion
to the published 12-month increase measured in September each year in the Construction
Cost Index, unless the EVWD Board of Directors determines that such an increase shall
not be effective for the next succeeding fiscal year, or if the index does not increase or
change.
Water Connection Fees
The water meter connection charge is the charge for installation and materials between
the service angle stop and customer connection side within the meter box. Such regular
charge shall be paid in advance by the applicant. Cost varies for the requested meter size
and type. Service line connections to the main are separate from this fee and would be
an additional non-regular charge. Where there is a non-regular charge, the District
reserves the right to require the applicant to deposit an amount equal to the estimated
cost of such service connection.
15
RATE
EFFECTIVE DATE
7/1/2023
RATE
EFFECTIVE DATE
10/11/2023
3/4" T-10 8,417$ 9,531$ 930$
3/4" Mach 10 8,417$ 9,531$ 1,035$
1"14,030$ 15,884$ 1,100$
1 1/2"28,060$ 31,766$ 1,495$
2"44,895$ 50,826$ 1,780$
3"89,790$ 158,832$ 7,515$
4"140,297$ 397,081$ 10,030$
6"280,595$ 635,327$ 15,875$
8"785,667$ 1,270,665$ 17,360$
10"1,178,500$ 2,064,814$ 22,355$
12"2,244,790$ 2,541,308$ 2,244,790$
CAPACITY CHARGE
METER
CONNECTION
CHARGE
METER
SIZE
Service Installation Benchmark Costs
Installation charges will be estimated by the District based on availability of District staff
to complete the work-site specific construction conditions and requirements. The costs in
the table shown are benchmarks, or cost references to begin from, for a short or long-
side service installation based on requested meter size. Permitting, paving/concrete costs,
and non-typical conditions are not included and will need to be assessed per connection,
on a case-by-case basis. If the applicant elects not to have District staff complete the
installation, then an administrative fee of 5% of the estimate will be charged.
16
METER
SIZE
SHORT SIDE
LATERAL
LONG SIDE
LATERAL
3/4" T-10 6,005$ 11,030$
3/4" Mach - 10 6,110$ 11,135$
1"6,035$ 11,060$
1 1/2"6,420$ 11,445$
2"6,640$ 11,665$
3"14,765$ 22,690$
4"17,210$ 25,135$
6"22,985$ 30,915$
8"24,470$ 32,395$
10"29,465$ 37,390$
Wastewater Connection Fees
The sewer service connection charge is the charge for the type and size of service
connection desired. Such regular charge shall be paid in advance by the applicant. Where
there is no such regular charge, the District reserves the right to require the applicant to
deposit an amount equal to the estimated cost of such service connection. The following
charges are hereby established and shall be collected at the time of application for sewer
connection:
CHARGE OR FEE NAME
Permit Charge $ 275 per connection
Inspection Charge $ 100 per connection (per visit)
Capacity Charge $ 8,803 per EDU or portion thereof
CHARGE / FEE
On July 1 of each year Wastewater Capacity Charges will automatically increase in
proportion to the published 12-month increase measured in September each year in the
Construction Cost Index, unless the EVWD Board of Directors determines that such an
increase shall not be effective for the next succeeding fiscal year, or if the index does not
increase or change.
Fire Service Connection Charges
The fire service charge is the charge for the type and size of fire service connection
desired. Such regular charge shall be paid in advance by the applicant. Where there is no
17
regular charge, the District reserves the right to require the applicant to deposit an
amount equal to the estimated cost of such service connection.
Installation charges will be estimated by the District based on availability of District staff
to complete the work and site-specific construction conditions and requirements. If the
applicant elects not to have District staff complete the installation then an administrative
fee of 5% of the estimate will be charged.
Developer Services’ Charges and Fees
1. Availability Letter
A fee of $155 will be charged for a water or sewer verification letter inquiry.
2. Construction Inspection Charge (per day or actual cost)
Where a customer service connection or facility requires inspection by District
personnel, the customer shall be charged for such inspection at the rate of $905 per
day. When District personnel are not available, inspection will be performed by third
party inspectors retained by the District. The hourly rate for third-party inspectors will
be established at the beginning of each third-party inspection assignment.
3. Development Agreement (per agreement or actual cost)
A Development Agreement is required whenever a project will include the design and
construction of water or sewer facilities which will be dedicated to the District. This
$1,375 minimum fee will cover the cost to initiate and execute a Development
Agreement with the District.
4. Development and Engineering Research Fee ($95 per hr; 4-hr min)
This fee will provide funding for Engineering staff to conduct research of existing
accounts, easements, and other development related materials. This would only apply
to obtaining information for Developers that is unique to their development area and
not general information, such as fee schedules or District design standards. Utility
Requests and providing of As-builts or other locating documentation is not included in
this fee.
This fee also encompasses the District’s time and effort spent on assisting customers
who have a requirement to construct water or sewer facilities, which must meet
District needs and conform to District standards.
18
5. Development Meeting Fee (per meeting, after first meeting)
This $475 per meeting fee will provide funding for Engineering staff to prepare for
and attend, meetings with developers regarding their projects beyond the initial
project consultation meeting and set-up. This fee will primarily impact larger, more
complex developments which may require multiple coordination meetings with staff.
6. Easement/Quitclaim Processing (per easement)
A minimum fee of $975 will be charged for review and recordation of each Easement
or Quitclaim document. If complexity of the legal document requires more time, legal
counsel, or land surveyor counsel, actual costs beyond the minimum will be collected.
7. Fire Hydrant Installation Charge (actual cost or 5% of estimate)
Installation charges will be estimated by the District based on availability of District
staff to complete the work and site-specific construction conditions and requirements.
If the applicant elects not to have District staff complete the installation, an
administrative fee of 5% of the estimate will be charged.
8. General Water/Sewer Service Inquiry
A fee of $75 will be charged for a Technician’s time for general inquiries for service to
a parcel. This inquiry usually arises from realtors and small developers.
9. New Construction Chlorination and Flushing Fee ($355 min to actual cost)
A minimum fee of $355 will be charged for new construction disinfection plan review,
inspection, and flushing prior to sampling.
10. Sewer Manhole and Valve Can Deposit
A refundable deposit of $1,500 per manhole will be charged for each sewer manhole
structure shown on the sewer construction plans. A refundable deposit of $500 per
valve can will be charged for each valve can shown on the water construction plans.
These deposits will be returned when all manholes and valve cans are constructed to
final grade by the Developer’s contractor and verified by the District.
As an alternative to the manhole and valve can deposit, a guarantee bond may be
provided in the same amount as the deposit. The guarantee bond shall contain
covenants that are satisfactory to the District. Such bond shall remain in force until all
manholes and valve cans are constructed to final grade by the Developer’s contractor
and verified by the District.
19
11. Special Facility Charge
A special facility charge shall be required for development of limited service whenever
special facilities, including pressure regulators are required. The charge to be made
to a developer or owner of land that is considered by the District to be within a limited
service area shall be based upon the Developer’s or Landowner’s proportionate share
of the cost for the installation of such Special Facility. Such proportionate share to be
borne by the developer or landowner shall be based on the percentage of such
development to the entire limited service area to be served by the Special Facilities;
and the same number of acres or area under normal conditions and the cost of
facilities to serve the acreage of area under special conditions at a higher cost.
12. Water Main Extension Charge
The water main extension charge is for the construction of a water main extending to
the far side of the property to be served. This charge shall be based on the prevailing
rates of time and material per District approved plans. The customer shall be
responsible to provide the plans and for all applicable Water/Sewer Plan Checking
charges described below.
13. Water Quality Sampling Fee (per sample)
A fee of $135 will be charged for each water quality sample taken for new
construction.
14. Water/Sewer Plan Checking Fee (per sheet)
This $800 fee is collected per sheet and is a minimum that will cover up to three in-
house plan checks. When District personnel are not available, plan checking will be
performed by third-party Engineers retained by the District. The hourly rate and
estimate for three plan checks for third-party plan checkers will be established at the
beginning of each third-party plan checking assignment. The minimum fee per sheet
established can be collected initially to begin plan checking and the Developer will
deposit the difference to cover the third-party’s plan check cost to the District. Should
more than three plan checks be required, additional funds may be deposited to bill
against, and hours will be billed at the Engineering Research Fee or the cost of the
third-party Engineer. Plan checking costs shall be paid before plans are returned.
15. Water System Design Charge
A water system design charge shall be required for all main extensions, service
20
connections and/or special facilities requiring the preparation of engineering plans and
drawings. The water system design charge is hereby established as the fee charged
by an Engineering firm of the District’s choosing, plus an additional 10% thereof for
the District’s administrative costs. In the event the costs exceed the fees charged, the
additional cost will be billed to the customer.
16. Will Serve Letter
Once a Developer has compiled or met all the items needed to make the request for
a Will Serve Letter, per the Development Guidelines and Procedures Handbook, they
may request and pay a minimum fee of $575 to review and evaluate the infrastructure
needs for a proposed project within the District’s service area. Should additional time
be required for reviewing the project information and to prepare the document, the
hourly rate established for the Engineering Research Fee shall be assessed in addition
to the minimum fee .
Summary of charges/fees for Developer Services:
CHARGE OR FEE NAME CHARGE / FEE
Availability Letter $155
Construction Inspection Charge $905 (per day) or actual cost
Development Agreement $1,375 (per agreement; min to actual cost)
Development and Engineering Research Fee $95 (flat rate, per 4-hr min)
Development Meeting Fee $475 (per meeting, after first meeting)
Easement/Quitclaim Processing $975 (per easement)
Fire Hydrant Installation Charge actual cost or 5% of estimate
General Water/Sewer Service Inquiry Fee $75
New Construction Chlorination and Flushing Fee $355 (min to actual cost)
Sewer Manhole and Valve Can Deposit $1,500 (per manhole); $500 (per valve can)
Special Facility Charge
Based on proportionate share of Developer
or Landowner share of the installation of
Special Facility
Water Main Extension Charge Based on prevailing rates of time and
material per District approved plans
Water Quality Sampling Fee $135 (per sample)
Water/Sewer Plan Checking Fee $800 (per sheet; 3 plan checks)
Water System Design Charge actual cost + 10% for administrative costs
Will Serve Letter $575 (min fee)
21
Section 4: Pretreatment Program
The District performed permit related activities will include permit processing,
inspections and monitoring. The following fees are anticipated to cover the annual costs
for each class of dischargers for the Pretreatment Program.
Class* Annual Fee
I User $2,000
II User $1,000
III User $150
IV User $500
V User $200
VI User $150
*Descriptions of each user type are defined in the East Valley Water District Sewer
Regulations and Service Charge Ordinance, definitions section.
Penalties for Enforcement Response Plan Discharge
Violations
The District may assess a penalty against a person or entity in compliance with the
requirements of ordinances, and enforcement response plan guidelines.
Violation & Circumstances Penalty
First Discharge
Violation in a 12-month Period - No harm to POTW None
Second Discharge
Violation in a 12-month Period - No harm to POTW $100
NMP Violation(s) —Does not result in Acute Non-
Compliance $100
22
NMP Violation(s) – Acute Non-Compliance $100, $100, $500, $1000,
each subsequent violation
Any discharge violation(s) that result in Quarterly SNC
status
$100, $100, $500, each
subsequent violation
Any discharge violation(s) that result in pass-through,
sludge contamination, or interference
$1,000 or as determined
by District review
Dilution of Wastestream — First offense None
Dilution of Wastestream — Repeat offense(s) $100
Continuous pH Monitoring indicates noncompliance $100
Septic Waste Discharged at non-authorized site or in
noncompliance with limitations at the POTW — First
Offense
$100
Septic Waste Discharged at non-authorized site or in
noncompliance with limitations at the POTW — Repeat
Offense(s)
$100, $1,000 or as
determined by the District
Discharge of any prohibited Waste — First Offense $100
Discharge of any prohibited waste — Repeat Offense(s) $100, $100, $1000 or as
determined by the District
Penalties for Enforcement Response Plan Monitoring
Violations
The District may assess a penalty against a person or entity in compliance with the
requirements of ordinances, and enforcement response plan guidelines.
Violation & Circumstances Penalty
Failure to sample or resample within required timeframes —
Doesn’t result in Acute Non-Compliance None
23
Failure to sample or resample within required timeframes —
Results in Acute Non-Compliance $100
Improper Sample Location — First offense None
Improper Sample Location — Repeat offense(s) $100, $500 for
subsequent violations
Improper sample collection or analytical methods — First
offense None
Improper sample collection or analytical methods — Repeat
offense(s)
$100, $500 for
subsequent violations
Failure to monitor for all required pollutants — First offense None
Failure to monitor for all required pollutants — Repeat
offense(s)
$100, $500, $1000 for
subsequent violations
Failure to properly maintain or operate Flow monitoring or
pretreatment equipment — First offense. None
Failure to properly maintain or operate Flow monitoring or
pretreatment equipment— Repeat offense(s)
$100, $500, $1000 for
subsequent violations
Failure to install required monitoring or flow equipment — First
offense. $100
Failure to install required monitoring or flow equipment —
Repeat offense(s) $100/day
Penalties for Enforcement Response Plan Reporting
Violations
The District may assess a penalty against a person or entity in compliance with the
requirements of ordinances, and enforcement response plan guidelines.
Violation & Circumstances Penalty
Failure to maintain records or reports as required by permit
— First offense None
24
Failure to maintain records or reports as required by permit
— Repeat offense(s) $100
Failure to submit records, reports, or correspondence — less
than 5 days late None
Failure to submit records, reports, or correspondence —
between 5 and 45 days late. $100
Failure to submit records, reports, or correspondence —
Over 45 days late – Significant Non-Compliance
$100, $500, $1000 for
subsequent violations
Failure to report SMR Discharge violation — First offense None
Failure to report SMR Discharge violation — Repeat
offense(s) $100
Failure to report Slug Load or spill discharge violation —
First offense & no harm None
Failure to report Slug Load or spill discharge violation —
Repeat offense(s) — No harm $100
Failure to report Slug Load or spill discharge violation –
Harm
$250, $500, $1000 and
$1500 for subsequent
violations
Failure to submit additional monitoring — First offense None
Failure to submit additional monitoringRepeat offense(s) $100
Penalties for Enforcement Response Plan Permit
Violations
The District may assess a penalty against a person or entity in compliance with the
requirements of ordinances, and enforcement response plan guidelines.
Violation & Circumstances Penalty
25
Failure to submit permit application or renewal by
due date None
Failure to submit permit application renewal before
current permit expires $100
Failure to submit permit application that results in a
permit reclassification $100
Failure to comply with any permit condition of
requirement — First offense $100
Failure to comply with any permit condition or
requirement — Repeat offense(s)
$100, $500, $1000 for
subsequent violations
Unauthorized or Unpermitted Discharge — first
offense — No harm to POTW None
Unauthorized or Unpermitted Discharge — Repeat
offense(s) — No harm to POTW $100
Unauthorized or Unpermitted Discharge — First
offense — Harm to the POTW
$100, $500, $1000 depending
of severity
Unauthorized or Unpermitted Discharge — Repeat
offense(s) — Harm to the POTW
$100, $500, $1000 or as
determined by District review
Failure to submit required permit information or any
process modification — First offense None
Failure to submit required permit information or any
process modification — Repeat offense(s) $100
Failure to implement any plan required by the permit
(i.e. slug load, spill prevention, TOMP, etc.) — First
offense
$100
Failure to implement any plan required by the permit
(i.e. slug load, spill prevention, TOMP, etc.) —
Repeat offense(s)
$100, $500, $1000 for
subsequent violations
26
Penalties for Enforcement Response Plan Miscellaneous
Violations
The District may assess a penalty against a person or entity in compliance with the
requirements of ordinances, and enforcement response plan guidelines.
Violation & Circumstances Penalty
Denial of entry to perform monitoring or inspections — first
offense None
Denial of entry to perform monitoring or inspections —
Repeat offense(s)
$100, $500, $1000 for
subsequent violations
Spill containment not present or inadequate — First offense None
Spill containment not present or inadequate — Repeat
offense(s) $100
Spill containment area not properly maintained — First
offense None
Spill containment area not properly maintained — Repeat
offense(s)
$100, $500, $1000 for
subsequent violations
Illegal water softening equipment installed — First offense None
Illegal water softening equipment installed — Repeat
offense(s)
$100, $500, $1000 for
subsequent violations
Failure to implement Best Management Practices (BMPs) —
First offense None
Failure to implement Best Management Practices (BMPs) —
Repeat offense(s)
$100, $500, $1000 for
subsequent violations
27
History of Revisions
DATE
ADOPTED RESOLUTION
UPDATED OR
RESCINDED REVISION
DATE
EFFECTIVE
10/11/23 2023.15 2023.05 Update Water Capacity Fees 10/11/23
Pass-Through N/A N/A Update Capacity Fees
(per Cost Construction Index)07/01/23
03/22/23 2023.05 2021.13 Addition of Pretreatment Program Penalties 04/01/23
Pass-Through N/A N/A Update Capacity Fees
(per Cost Construction Index)07/01/22
08/11/21 2021.13 2021.07 Update AMI Opt-Out Fee 09/01/21
Pass-Through N/A N/A Update Capacity Fees
(per Cost Construction Index)07/01/21
05/12/21 2021.08 2019.19 Update Water and Wastewater Charges 01/01/22
05/12/21 2021.07 2019.19 Update Miscellaneous and Development Fees 06/01/21
Pass-Through N/A N/A Update Capacity Fees
(per Cost Construction Index)07/01/20
12/11/19 2019.19 2019.06 Update Miscellaneous and Capacity Fees 01/01/20
05/22/19 2019.06 2017.07 Update Water Charges 01/01/20
07/11/18 2018.12 2017.01 Update Wastewater Charges 08/12/18
05/24/17 2017.07 2017.01 Update Water Charges 07/01/17
01/25/17 2017.01 2016.05
Update Wastewater Treatment Charges and
Renew 5-Year Pass-Through Provision 07/01/17
02/24/16 2016.05 2015.04
Update Wastewater Charges and
Miscellaneous Fees 04/01/16
03/25/15 2015.04 2014.32 Implement Water Budget Based Rates 06/01/15
03/25/15 2015.04 Ord 391 Update Wastewater Charges 06/01/15
IB Consulting, LLC
31938 Temecula Parkway, Suite A #350
Temecula, CA. 92592
Capacity Fee Study
East Valley
Water District
December 11, 2019
East Valley Water District – Capacity Fee Study
Page | 2
TABLE OF CONTENTS
Executive Summary ......................................................................................................................... 3
Overview .......................................................................................................................................... 4
Capacity Fee Methodology ............................................................................................................... 5
Existing System Demand and Future Development ......................................................................... 8
Utility Asset Values ........................................................................................................................... 9
Capacity Charge Analysis .............................................................................................................. 12
Updated Capacity Fees .................................................................................................................. 16
TABLES
Table 1 - 2019 Master Plan Demand Projections ............................................................................. 8
Table 2– Water Asset Replacement Cost Less Depreciation ......................................................... 10
Table 3– Wastewater Asset Replacement Cost Less Depreciation ............................................... 10
Table 4– Utility Net RCLD .............................................................................................................. 11
Table 5– Existing Water Meter Equivalents .................................................................................... 12
Table 6– Water Buy-In by Asset Category ..................................................................................... 13
Table 7– Wastewater Buy-In by Asset Category ............................................................................ 14
Table 8– Water Incremental Cost Component ............................................................................... 14
Table 9– Wastewater Incremental Cost Component ...................................................................... 15
Table 10– Water Proposed Capacity Fee ...................................................................................... 16
Table 11– Wastewater Proposed Capacity Fee ............................................................................. 16
FIGURES
Figure 1 – Capacity Fee Analysis ..................................................................................................... 5
Figure 2 – Asset Valuation ............................................................................................................... 6
East Valley Water District – Capacity Fee Study
Page | 3
Executive Summary
In June 2019, East Valley Water District (District) engaged IB Consulting, LLC (IBC) to complete a capacity
charge nexus study for its water and wastewater enterprises. This Water and Wastewater Capacity Fee Study
Report (Report) describes the approach, methodology, and technical analysis used to derive updated capacity
charges per California State Government Code, Section 66013 (GC 66013). GC 66013 allows an agency to
charge the estimated reasonable cost to serve a new connection for which the charge is imposed.
Currently, the District’s water capacity charge is $5,200 for a 3/4” meter, and the wastewater capacity charge
is $5,905 for a single-family residential connection, defined as one Equivalent Dwelling Unit (1 EDU). The
District’s capacity charges were last updated in 2014 and have not been increased or indexed annually to
keep pace with the cost of construction. The updated capacity charge for water includes two primary
components: 1) a Buy-In component for existing facilities and 2) an Incremental component for a new water
treatment plant. The wastewater capacity charge also includes two components: 1) a Buy-In component for
existing collection facilities and 2) an Incremental component for the Sterling Natural Resource Center (SNRC)
and the upsizing of specific pipeline facilities required to accommodate additional demand from new
development.
The analysis contained in this Report justifies modifying the water capacity charges to $7,228 per 3/4” meter,
and the wastewater capacity charges to $7,560 per EDU. These updated charges proportionately recover
new development’s share of facility costs in existence and new public facilities to be acquired or constructed
over a 20-year planning horizon (2040) (Planning Horizon). In addition to new connections, current customers
expanding their capacity at an existing connection will also pay for the incremental demand placed on the
water and wastewater systems.
East Valley Water District – Capacity Fee Study
Page | 4
Overview
Capacity Fees
A “Capacity Charge” is defined within GC 66013 as a charge for public facilities in existence at the time a
charge is imposed or charges for new facilities to be constructed in the future that is of benefit to the person
or property being charged. Capacity fees ensure new development pays its fair share to connect to the system
and does not cause additional burdens to current customers. Capital and infrastructure costs required to meet
new demand/connections should be paid by those creating the cost to be incurred.
Based on the requirements of GC 66013, capacity charges must be based on the “reasonable cost” to
accommodate additional demand from new development or the expansion of existing development. In
addition, the State Constitution was amended through the approval of Proposition 26 in 2010, which redefined
a “tax” as any levy, charge, or exaction of any kind imposed by a local government. However, seven
exemptions are part of Proposition 26, including cost-based charges imposed as a condition of property
development (i.e. capacity charges) so long as a reasonable relationship between the charges and cost of
facilities are linked. Therefore, the nexus study summarized in this Report connects the proposed charge to
the reasonable cost of improvements in compliance with the Proposition 26 exemption.
District Background
The District is located in the high-desert of San Bernardino County (County) and consists of the entire City of
Highland, portions of the City of San Bernardino, and unincorporated areas of the County. The District spans
almost 18,000 acres and currently serves a population of approximately 103,000. Since the District’s inception
in 1954, it now provides both water and wastewater service to its customers. The District recently completed
a new Master Plan for each of the two utility systems (Water Master Plan and Wastewater Master Plan, or
collectively Master Plans). Based on the Master Plans, the population is expected to be approximately
142,000 by the year 2040, representing a 37 percent increase in population. This population growth results in
increased water demands, water supply requirements, and wastewater capacity needs.
Based on the District’s current system assets and planned improvements required to accommodate growth,
the proposed capacity charges for water and wastewater include both a Buy-In component and an Incremental
component. The Buy-In component is calculated by determining the Replacement Cost of assets Less
Depreciation (RCLD). The District has a significant amount of backbone infrastructure available to
accommodate growth, and the existing assets serve as a proxy to determine the current facility standards
serving existing customers. In addition to existing infrastructure, the Master Plans identify specific capital
improvements required to accommodate growth through 2040. The Incremental component of the proposed
water capacity fee includes a new eastside water treatment plant. For wastewater, the Incremental component
consists of the SNRC and the necessary upsizing of existing facilities.
East Valley Water District – Capacity Fee Study
Page | 5
Capacity Fee Methodology
There are four primary steps in calculating capacity fees: (1) determine demand and define the baseline
requirements for a connection, meter equivalent, or equivalent dwelling unit based on planning documents,
2) calculate the capital costs required to serve new or expanding connection, (3) determine any credits or
offsets to apply towards the total capital costs, such as grants, existing debt obligations, and available funding
through previously collected capacity fees, and (4) apportion the capital costs equitably to various types of
connections based on the demand placed on the utility system to ensure a fair share allocation.
Figure 1 – Capacity Fee Analysis
In addition to the four steps above, the three primary approaches for calculating capacity fees, are the “Buy-
In Approach,” “Incremental-Cost Approach,” and “Hybrid Approach.” The Hybrid Approach accounts for both
a buy-in component and an incremental component. Additional considerations may be required to allocate
costs between existing and new customers appropriately and to ensure no duplication of cost occurs. The
selected approach primary depends on the unique circumstances of the utility, such as existing build-out of
the service area, expected future growth, exiting infrastructure capacity, and access to up to date planning
documents/master plans.
East Valley Water District – Capacity Fee Study
Page | 6
Buy-In Approach
The system Buy-In Approach accounts for the current facility standard that existing customers receive through
their service. Using this approach ensures that new development buys-in to the utility system and funds the
necessary improvements to maintain and receive the same level of service experienced by today’s customers.
Therefore, new development pays an amount equal to their fair share of the system. This approach eliminates
any potential funding of existing system deficiencies as the District’s current asset inventory only reflects
improvements that are in the ground today.
The basis of the Buy-In approach is the value of the existing system. System assets may be valued in a few
different ways. Options include using the original cost of the improvements (OC), original cost less
depreciation of system assets to account for the time improvements are in service (OCLD), replacement cost
of the improvements by bringing the original cost into today’s dollars (RC), and replacement cost less
depreciation which brings both the original cost and the accumulated depreciation value into today’s dollars
(RCLD). The most common valuation technique is RCLD. Using RCLD generates a system value based on
today’s cost of the improvements by indexing the original cost by an appropriate indicator that reflects the
change in cost over time, while also accounting for years in service. For this analysis, we calculate RCLD by
using the Construction Cost Index (CCI), published by Engineer’s News-Record.
Figure 2 – Asset Valuation
Once the system value is determined, dividing the total value by total existing demand derives a value per
unit of demand. Demand is commonly used for system design. It is a primary driver for the current
configuration of the system and how the system expands in the future. Using meter size and the corresponding
meter capacity (water flow demand in gallons per minute) provides a means to derive a value per Meter
Equivalent (ME).
This approach is suited for agencies that 1) have built most of their facilities in advance with only a small
portion of facilities needed for build-out, 2) don’t have an adopted long-term capital improvement plan, or 3)
the “build-out” date is so far out in the future that it is difficult to project growth accurately and required facilities.
East Valley Water District – Capacity Fee Study
Page | 7
Incremental Cost Approach
The Incremental Cost Approach is based on the principle that new development should pay for improvements
required to connect them to the system, including the need for any additional capacity and/or expansions.
This approach is typically used when there are specific capital improvements identified within planning
documents that are needed for growth to occur. The Incremental Cost Approach uses the District’s most
recent Master Plan to determine growth-related improvements. Projects associated with routine repair &
replacement are not included, and any improvements identified within the Master Plan that are required to
address existing deficiencies are removed. Also, specific projects within the Master Plan may benefit both
existing and new development. In these instances, new development only pays its proportionate share based
on the demand or capacity taken from these projects.
As part of this study, there is one capital project included using the Incremental Cost Approach for water and
capital expansions required for wastewater. The District plans to construct a new water treatment plant on the
east side of the District’s service area. The treatment plant will treat surface water from the Santa Ana River
and serve the additional demand generated by new development. The Eastside Water Treatment Plant is
currently sized with a capacity of 3 Million Gallons per Day (MGD). A rate per gallon of capacity will be derived
to charge new development based on their proportional share of the capacity in the new plant. The
Wastewater Incremental component includes the new SNRC as well as certain upsizing of facilities within the
Wastewater Master Plan required for growth to occur.
Hybrid Approach
The Hybrid Approach is utilized when the existing system has available capacity and/or is substantially built
while specific capital improvements are clearly identified and needed to serve new development. Given that
the District has a significant amount of backbone infrastructure already built for its water and wastewater
systems and has a recently updated master plan that identifies additional improvements needed to serve new
development, the Hybrid Approach was used for updating the District’s capacity fees.
East Valley Water District – Capacity Fee Study
Page | 8
Existing System Demand and Future Development
Water System Demand
Based on growth forecasts developed within the 2019 Water Master Plan, the population within the District’s
service area is expected to grow to approximately 142,000 by 2040. This population growth results in
increased water demands and water supply requirements. The Water Master Plan projected total water
demand through 2040 by using a combination of population projections, land use development, and the 175
Gallons Per Capacity Per Day (GPCD) compliance target from the Regional Water Urban Management Plan.
The 175 GPCD translates to 609 gallons per day for 1 ME (3.48 persons per household x 175 GPCD). Over
the Planning Horizon, projections yielded a total water demand of 27.69 MGD (2040 Water Demand).
Wastewater System Demand
The existing wastewater system consists of approximately 213 miles of pipeline, 4,400 wastewater manholes,
7 siphons, and 5 diversion structures. The existing wastewater system conveys flows into San Bernardino
Municipal Water Department’s (SBMWD) East Trunk Sewer, which outlets to the San Bernardino Water
Reclamation Plant (SBWRP).
The District’s wastewater collection system is substantially built, and effluent is conveyed to the City of San
Bernardino regional treatment plant. The District’s collection system includes approximately 213 miles of
pipeline ranging in size from 4 inches to 24 inches in diameter. The wastewater system does not include any
lift stations or force mains, and all flow is conveyed by gravity to the East Trunk Sewer pipeline. Similar to the
Water Master Plan, total demand over the Planning Horizon was estimated using population projections, and
future land use data to yield an aggregate demand of 11.79 MGD (2040 Wastewater Demand). The
Wastewater Master Plan also identifies a near-term demand, through 2025, equal to 10.1 MGD (2025
Wastewater Demand). These projections result in an incremental increase in demand of 2.87MGD by 2025
and an additional increase in demand from 2025 to 2040 of 1.69MGD. Table 1 provides a summary of existing
and future demands.
Table 1 - 2019 Master Plan Demand Projections
Utility
Existing
[A]
2025
Demand
[B]
2025
Incremental
Demand
B - A =
[C]
2040
Demand
[D]
2040
Incremental
Demand
D - B =
[E]
Water System 20.29 MGD 25.34 MGD 5.05 MGD 27.69 MGD 2.35 MGD
Wastewater System 7.23 MGD 10.1 MGD 2.87 MGD 11.79 MGD 1.69 MGD
East Valley Water District – Capacity Fee Study
Page | 9
Utility Asset Values
Asset Value
The first step in determining the buy-in facilities development charge is to determine the value of the existing
system. As mentioned above, there are several methods of determining the current value of assets, but, for
this study, RCLD was used. RCLD valuation was thought to be the most equitable and reasonable approach
since it takes into consideration the time value of money and factors in the remaining useful life of each asset.
To accomplish this, the District provided fixed asset records containing the original cost of each asset.
Replacement cost was estimated by bringing forward the original costs to today’s dollars to reflect the
estimated cost if a similar asset were constructed today. This original cost for each asset was indexed by the
annual percentage change of the Construction Cost Index for 20-cities (CCI), published by the Engineer’s
News Record. For 2018, the CCI value is 11,062. Accumulated depreciation was also indexed by CCI to
maintain consistency with 2019 dollars. Subtracting the accumulated depreciation from the replacement cost
yields the updated RCLD of each utility and reflects facility standards in 2019 dollars. Table 2 and Table 3
show the water assets and wastewater assets, respectively. Each table summarizes original cost,
replacement cost in 2019 dollars, accumulated depreciation in 2019 dollars, and assets adjusted for the 2019
depreciation (RCLD). With the asset listings, Land values do not depreciate, and the replacement value is
estimated by increasing the original acquisition costs by a 2% inflation limit in-line with Proposition 13
constraints on assessed values. In addition, Water Rights also do not depreciate, and since water rights do
not go away, the replacement cost is equivalent to the original acquisition cost of North Fork Mutual Water
Company shares owned by the District. Detailed asset listings are on file with the District.
East Valley Water District – Capacity Fee Study
Page | 10
Table 2– Water Asset Replacement Cost Less Depreciation
Asset Category
Original
Cost
[A]
Replacement
Cost
(2019 $)
[B]
Accumulated
Depreciation
[C]
Accumulated
Depreciation
(2019 $)
[D]
RCLD
B - D =
[E]
General $15,399,082 $18,230,814 $2,992,456 $4,245,444 $13,985,370
Hydrants $51,701 $84,394 $35,710 $58,328 $26,066
Land $2,583,057 $4,162,252 $- $- $4,162,252
Meters $87,231 $131,829 $53,159 $82,629 $49,200
Pumping $14,422,349 $27,767,017 $6,190,302 $17,179,912 $10,587,105
Storage $19,837,173 $38,660,328 $6,730,702 $17,394,540 $21,265,788
Transmission/Distribution $71,171,257 $159,620,760 $23,078,956 $80,372,865 $79,247,895
Treatment $28,074,591 $39,003,730 $9,867,870 $14,808,909 $24,194,821
Water Rights $1,934,473 $1,934,473 $- $- $1,934,473
Wells $16,004,293 $26,416,665 $5,914,995 $12,810,768 $13,605,897
Total $169,565,204 $316,012,263 $54,864,150 $146,953,395 $169,058,867
Table 3– Wastewater Asset Replacement Cost Less Depreciation
Asset Category
Original
Cost
[A]
Replacement
Cost
(2019 $)
[B]
Accumulated
Depreciation
[C]
Accumulated
Depreciation
(2019 $)
[D]
RCLD
B - D =
[E]
Collection $27,510,245 $105,695,787 $10,788,676 $66,436,784 $39,259,002
General $8,127,597 $9,785,547 $1,994,319 $2,836,188 $6,949,358
Land $713,940 $1,295,735 $- $- $1,295,735
Total $36,351,783 $116,777,068 $12,782,995 $69,272,973 $47,504,096
East Valley Water District – Capacity Fee Study
Page | 11
Asset Value Adjustments
With the Buy-In Approach, any outstanding debt obligations are subtracted from the RCLD to reduce the value
of the system as these liabilities funded improvements within the asset listings. The remaining debt obligations
will be paid through rates, and if the Buy-In component disregard debt, a customer would end up paying twice
for improvements funded through debt. Table 4 summarized the final net RCLD asset values for water and
wastewater.
Table 4– Utility Net RCLD
Assets/Liabilities Water
System
Wastewater
System
RCLD $169,058,867 $47,504,096
Debt Obligations Water
System
Wastewater
System
2010 Bonds (-) ($23,000,000) ($215,000)
2013 Bonds (-) ($7,875,000) ($4,210,000)
SB Valley Turnout (-) ($3,494,341)
SRF Plant 134 (-) (6,068,369)
Net RCLD $128,621,157 $43,079,096
East Valley Water District – Capacity Fee Study
Page | 12
Capacity Charge Analysis
Water Buy-In Component
The potential demand on the water system is proportional to the potential flow through each meter. The
American Water Works Association (AWWA) publishes the safe maximum operating capacity of each meter
type in Gallons Per Minute (GPM) of flow. Using the AWWA capacity information, an equivalency for each
meter size is set based on a 3/4” meter’s GPM. Table 5 provides a summary of the total MEs within the
District.
Table 5– Existing Water Meter Equivalents
Meter
Size
Number of
Accounts
[A]
AWWA
Capacity (gpm)
[B]
AWWA
Ratio
B ÷ 30 =
[C]
Equivalent
Meter Units
A × C =
[D]
5/8" 1,624 20 0.67 1,083
3/4" 14,834 30 1.00 14,834
1" 4,138 50 1.67 6,897
1 1/2" 261 100 3.33 870
2" 286 160 5.33 1,525
3" 65 320 10.67 693
4" 23 500 16.67 383
6" 14 1,000 33.33 467
8" 10 1,800 93.33 933
Total 21,255 N/A N/A 27,685
East Valley Water District – Capacity Fee Study
Page | 13
The net RCLD asset value of the Water Utility is divided by total MEs to derive the updated Capacity Fee per
3/4” meter. However, through our evaluation, certain assets are apportioned over total 2040 Demand. This
ensures new development is not overcharged as these assets will serve both existing and new connections.
These assets include: 1) the existing Treatment Plant that treats groundwater that can serve all connections,
2) Water Rights as these rights are now owned by the District in perpetuity, and 3) Wells which will serve all
customers. Table 6 provides a summary for determining the buy-in component by Asset Category, including
adjustments for outstanding debt to derive the Buy-In Component of the Water Capacity Fee.
Table 6– Water Buy-In by Asset Category
Asset Category RCLD
[A]
Allocation
Basis
[B]
Units of
Service
[C]
Unit Rate
A ÷ C
[D]
Conversion
Factor
[E]
$ per ME
D x E =
[F]
General $13,985,370 MEs 27,685 $505.15 1 ME $505.15
Hydrants $26,066 MEs 27,685 $0.94 1 ME $0.94
Land $4,162,252 MEs 27,685 $150.34 1 ME $150.34
Meters $49,200 MEs 27,685 $1.78 1 ME $1.78
Pumping $10,587,105 MEs 27,685 $382.41 1 ME $382.41
Storage $21,265,788 MEs 27,685 $768.12 1 ME $768.12
Transmission/
Distribution $79,247,895 MEs 27,685 $2,862.45 1 ME $2,862.45
Treatment $24,194,821 2040 Demand 27.69 MGD $0.87 609 gallons $532.13
Water Rights $1,934,473 2040 Demand 27.69 MGD $0.07 609 gallons $42.55
Wells $13,605,897 2040 Demand 27.69 MGD $0.49 609 gallons $299.24
Adjustments
Debt (-) $40,437,710 2040 Demand 27.69 MGD ($1.46) 609 gallons ($889.37)
Total $4,655.75
Wastewater Buy-In Component
For wastewater, existing demand is reflected by total Equivalent Dwelling Units (EDUs), where 1 EDU reflects
a single-family residential customer with an average daily flow of 245 gallons per day. Existing customers are
assigned EDUs based on their average daily flow. Based on the District’s billing data, there are a total of
29,500 wastewater EDUs, which reflects exiting flow demand.
East Valley Water District – Capacity Fee Study
Page | 14
The net RCLD asset value of the Wastewater Utility is divided by the total EDUs to derive the updated Capacity
Fees. Table 7 provides a summary for determining the buy-in component by Asset Category, including
adjustments for outstanding debt to calculate the Buy-In Component of the Wastewater Capacity Fee.
Table 7– Wastewater Buy-In by Asset Category
Asset Category RCLD
[A]
Allocation
Basis
[B]
Units of
Service
[C]
Unit Rate
A ÷ C
[D]
Conversion
Factor
[E]
$ per ME
D x E =
[F]
Collection $13,985,370 EDUs 29,500 $1,330.81 1 EDU $1,330.81
General $26,066 EDUs 29,500 $235.57 1 EDU $235.57
Land $4,162,252 EDUs 29,500 $43.92 1 EDU $43.92
Adjustments
Debt (-) $4,425,000 2040 Demand 11.79 MGD ($0.38) 245 gallons ($91.95)
Total $1,518.36
Water Incremental Cost Component
As part of the Hybrid Approach, the water capacity fee also includes the eastside water treatment plant within
the Water Master Plan. The cost estimate of the plant is $12,672,000, which includes the transmission line
connecting the new plant to the water system. The Eastside Treatment Plant cost estimate reflects a 3MGD
facility, which equates to a cost of $4.22 per gallon. Utilizing the gallons per ME equal to 609 gallons , as
shown in Table 8, the Incremental Cost Component equals $2,572.42.
Table 8– Water Incremental Cost Component
Projects Cost Estimate
[A]
Allocation
Basis
[B]
Units of
Service
[C]
Unit Rate
A ÷ C
[D]
Conversion
Factor
[E]
$ per EDU
D x E =
[F]
Eastside
Treatment Plant $12,672,000 Plant Capacity 3 MGD $4.22 609 gallons $2,572.42
Total $2,572.42
East Valley Water District – Capacity Fee Study
Page | 15
Wastewater Incremental Cost Component
The wastewater capacity fee also includes an Incremental Cost Component to account for the new SNRC
and specific upsizing projects required to accommodate future growth. Table 9 provides a summary of the
Master Plan cost estimates associated with the 10 MGD SNRC and the upsizing of improvements. N -1
improvements are not included because this upsizing is directly related to the San Manual Casino expansion
and funded through a development agreement between the District and the San Manual Casino. Also, B-2 is
not included because the construction of the SNRC may eliminate the need for these improvements and
should be revisited after the SNRC is online.
Table 9– Wastewater Incremental Cost Component
Projects Cost Estimate
[A]
Allocation Basis
[B]
Units of
Service
[C]
Unit Rate
A ÷ C
[D]
Conversion
Factor
[E]
$ per EDU
D x E =
[F]
SNRC $155,398,672 Plant Capacity 10 MGD $15.54 245 gallons $3,807.27
N-1 $4,414,500 N/A - - - $-
N-2 $17,472,000 2025 Incremental Demand 2.87 MGD $6.09 245 gallons $1,491.51
N-3 $6,949,500 2025 Incremental Demand 2.87 MGD $2.42 245 gallons $593.25
B-1 $1,030,500 2040 Incremental Demand 1.69 MGD $0.61 245 gallons $149.39
B-2 $1,764,000 N/A - - - $-
Total $6,041.42
East Valley Water District – Capacity Fee Study
Page | 16
Updated Capacity Fees
Table 10 summarized the proposed water capacity charges by meter size, with the 3/4” meter set as 1 ME
and all remaining meter size capacity fees based on the calculated capacity ratios from AWWA as identified
within Table 5.
Table 11 summarizes the proposed wastewater capacity charges, for an equivalent single-family residential
dwelling unit or 1 EDU. Non-residential connections will be assigned EDUs on a case-by-case basis to account
for total flow and strength loading in relation to a single-family residential unit.
Table 10– Water Proposed Capacity Fee
Meter Size
AWWA
Capacity
Ratio
[A]
Buy-In
Component
[B]
Incremental
Component
[C]
Total Water
Capacity Fee
[D]
5/8" 0.67 $3,104 $1,715 $4,819
3/4" 1.00 $4,656 $2,572 $7,228
1" 1.67 $7,760 $4,287 $12,047
1 1/2" 3.33 $15,519 $8,575 $24,094
2" 5.33 $24,831 $13,720 $38,550
3" 10.67 $49,661 $27,439 $77,100
4" 16.67 $77,596 $42,874 $120,469
6" 33.33 $155,192 $85,747 $240,939
8" 93.33 $434,536 $240,092 $674,629
Table 11– Wastewater Proposed Capacity Fee
Single-
Family
Residential
Buy-In
Component
[B]
Incremental
Component
[C]
Total Wastewater
Capacity Fee
[D]
1 EDU $1,460 $6,041 $7,502
In conjunction with adopting updated water and wastewater capacity fees, the District should adjust the
capacity fees each year by applying the annual percentage change in the Engineering News Record
Construction Cost Index (CCI) to keep pace with inflation, coupled with a comprehensive update every 5
years.
31938 Temecula Parkway, Suite A #350, Temecula, CA 92592
1
Technical Memorandum Regarding
2019 Capacity Fee Revisions to Meter Capacity Ratios
Agency: East Valley Water District
Date: September 27, 2023
______________________________________________________________________________
2019 Capacity Fee Study
In 2019, IB Consulting LLC (IB Consulting) assisted the East Valley Water District (District) with updating
its capacity fees for water (2019 Capacity Fee Study). Since then, the District has implemented a meter
replacement program for new Advanced Metering Infrastructure (AMI) meters. These AMI meters allow
integration between the District’s communication network, data systems, and individual meters. The
direct communication between the AMI meters and the District’s data systems provides more accurate,
efficient meter reads.
The 2019 Capacity Fee Study derived water capacity fees for new connections that varied based on the
meter size, with bigger-sized meters paying more for the additional capacity taken based on each
meter's safe maximum operating flow as defined in gallons per minute (gpm) of flow. The new AMI
meters have different safe maximum operating flow specifications than those used during the 2019
Capacity Fee Study. Therefore, this technical memorandum identifies the adjustments to the District’s
capacity fee schedule resulting from the change in meter types.
Existing Capacity Ratios
The 2019 Capacity Fee Study identified the meter capacity ratios for each meter size based on the safe
maximum operating flow in gpm, with the baseline meter reflecting a 3/4” meter. The safe maximum
operating flow capacity for each meter size was divided by the 3/4” meters’ safe operating flow capacity
of 30 gpm to determine the equivalent meter ratio. In other words, the calculations convert all larger-
sized meters to an equivalent number of 3/4" meters based on the safe operating flow capacity of 30
gpm (Meter Equivalents or ME). The capacity ratio represents the potential flow through each meter
size compared to the flow through the base 3/4” meter to establish parity between meter sizes. Table
1 identifies the capacity ratios and total Meter Equivalents used in the 2019 Capacity Fee Study.
2
Table 1: 2019 Meter Equivalents
Meter
Size
Number of
Accounts
[A]
AWWA Capacity
(gpm)
[B]
AWWA
Ratio
B ÷ 30 = [C]
Meter
Equivalents
A × C = [D]
5/8" 1,624 20 0.67 1,083
3/4" 14,834 30 1.00 14,834
1" 4,138 50 1.67 6,897
1 1/2" 261 100 3.33 870
2" 286 160 5.33 1,525
3" 65 320 10.67 693
4" 23 500 16.67 383
6" 14 1,000 33.33 467
8" 10 1,800 93.33 933
Total 21,255 N/A N/A 27,685
Updated Capacity Ratios
The capacity ratios and total Meter Equivalents have been updated using the same approach from the
2019 Capacity Fee Study but reflecting the new AMI meter specifications, as shown in Table 2. To
maintain consistency with the 2019 Capacity Fee Study, the number of accounts remained intact to show
how the water capacity fee schedule changes from updating the meter capacity ratios. The result is an
increase in total Meter Equivalents (27,685 versus the previous amount of 21,255). The District is
currently updating its water and wastewater master plans, and once those are completed, a
comprehensive update to the District’s capacity fees will be performed. In addition, the new AMI meters
that may be issued include 10” and 12” meter sizes, which were added to the fee schedule shown in
Table 2.
3
Table 2: 2023 AMI Meter Equivalents
Meter
Size
Number of
Accounts
[A]
District AMI
Capacity (gpm)
[B]
District AMI
Capacity Ratios
B ÷ 30 = [C]
Meter
Equivalents
A × C = [D]
5/8" 1,624 20 0.67 1,083
3/4" 14,834 30 1.00 14,834
1" 4,138 50 1.67 6,897
1 1/2" 261 100 3.33 870
2" 286 160 5.33 1,525
3" 65 500 16.67 1,083
4" 23 1,250 41.67 958
6" 14 2,000 66.67 933
8" 10 4,000 133.33 1,333
10" - 6,500 216.67 -
12" - 8,000 266.67 -
Total 21,255 N/A N/A 29,517
Facility Costs Related to Capacity Fees
The 2019 Capacity Fee Study included both a Buy-In and Incremental component. The Buy-In component
included the District’s 2019 water system asset values by category, with an adjustment for the remaining
outstanding debt principal. The reduction in asset value ensures customers don’t pay twice for facilities
funded by debt because debt is covered by water rates. Table 3 identifies the Buy-In component
calculated using the Updated Meter Equivalents. Table 4 identifies the Incremental component of the
2019 Capacity Fee Study related to the Eastside Water Treatment Plant. The unit rate remains the same
and is based on the plant’s capacity, equal to 3 Million Gallons per Day (MGD).
4
Table 3: Water 2019 Buy-In Component by Asset Category with AMI Meters
Asset Category RCLD
[A]
Allocation Basis
[B]
Units of
Service
[C]
Unit Rate
A ÷ C
[D]
Conversion
Factor
[E]
$ per ME
D x E =
[F]
General $13,985,370 MEs 29,517 $473.81 1 ME $473.81
Hydrants $26,066 MEs 29,517 $0.88 1 ME $0.88
Land $4,162,252 MEs 29,517 $141.01 1 ME $141.01
Meters $49,200 MEs 29,517 $1.67 1 ME $1.67
Pumping $10,587,105 MEs 29,517 $358.68 1 ME $358.68
Storage $21,265,788 MEs 29,517 $720.46 1 ME $720.46
Transmission/
Distribution $79,247,895 MEs 29,517 $2,684.82 1 ME $2,684.82
Treatment $24,194,821 2040 Demand 27.69 MGD $0.87 609 gallons $532.13
Water Rights $1,934,473 2040 Demand 27.69 MGD $0.07 609 gallons $42.55
Wells $13,605,897 2040 Demand 27.69 MGD $0.49 609 gallons $299.24
Adjustments
Debt (-) $40,437,710 2040 Demand 27.69 MGD ($1.46) 609 gallons ($889.37)
Total $4,365.88
Table 4: Water 2019 Incremental Component
Project Cost Estimate
[A]
Allocation Basis
[B]
Units of
Service
[C]
Unit Rate
A ÷ C
[D]
Conversion
Factor
[E]
$ per ME
D x E =
[F]
Eastside
Treatment Plant $12,672,000 Plant Capacity 3 MGD $4.22 609 gallons $2,572.42
Updated Capacity Fees
Combining the revised Buy-In component with the AMI capacity ratios and the Incremental component
generates a new 2019 capacity fee equal to $6,938 for a 3/4” Meter Equivalent. The District’s capacity
fees are adjusted annually based on the annual change in the Engineer’s New Record Construction Cost
Index (ENR – CCI) for September. Table 5 summarizes the revised 2019 capacity fee by meter size and
increases the fee schedule to 2023 dollars based on the ENR – CCI index change from September 2019
(11,311) to September 2023 (13,173).
5
Table 5: 2023 Water Capacity Fee Schedule
Meter Size AMI Capacity
Ratio
[A]
Buy-In
Component
[B]
ENR – CCI
Adjustment
13,173 / 11,311 =
116.46%
[C]
Total Water
Capacity Fee
[D] = B x C
5/8" 0.67 $4,626 116.46% $5,387
3/4" 1.00 $6,938 116.46% $8,081
1" 1.67 $11,564 116.46% $13,468
1 1/2" 3.33 $23,128 116.46% $26,935
2" 5.33 $37,004 116.46% $43,096
3" 16.67 $115,638 116.46% $134,675
4" 41.67 $289,096 116.46% $336,687
6" 66.67 $462,553 116.46% $538,698
8" 133.33 $925,106 116.46% $1,077,396
10" 216.67 $1,503,297 116.46% $1,750,768
12" 266.67 $1,850,212 116.46% $2,154,791
These revisions should be accompanied by the 2019 Capacity Fee Study. A comprehensive update to
the District capacity fees will occur once the updated master plans are completed and adopted by the
Board.
O CTOBER 10, 2023
East Valley
Water District
Annual Audit
Fiscal year ended June 30, 2023
Responsibilities of Auditor
2
Audit District’s financial statements in accordance with
US Generally Accepted Auditing Standards,Government
Auditing Standards and the State Controllers Minimum
Audit Requirements for Special Districts
Plan the audit to express an opinion as to whether
managements financial statements are fairly presented,
inallmaterialrespects,inaccordancewithgenerally
accepted accounting principles (GAAP)
o Provide reasonable assurance, not absolute
Audit process
3
Interim audit procedures:
o Reviewed internal controls over financial reporting for the following
areas (inquiries, inspect documents, etc.):
Billing and cash receipts
Cash and investments
Information technology
Financial closing and reporting
Capital assets and long-term debt
o Performed internal control testing over the following areas, as
needed:
Cash disbursements
Purchasing and contracts
Payroll
Common controls over multiple areas (reconciliations, journal entries, etc.)
Audit process (continued)
4
Year-end audit procedures (audit of numbers):
o Conducted detailed audit of financial records
o Inquire, inspect, and examine (and confirm as applicable) evidence
about balances, transactions and events
o Performed analytical procedures (review and evaluate significant
variances and/or unusual transactions)
o Performed data analytics over disbursements
o Benford’s Law, check sequence, Holiday/weekend, etc.
o Review ACFR and evaluate for compliance with GAAP and GFOA
COA guidelines
Audit process (continued)
5
Significant changes from prior year:
o There were no significant changes in financial reporting from the
prior year.
o New accounting policies were adopted during the year.
o GASB 96, SBITA
Completing the process
6
Independent Auditor’s Report
o Unmodified opinion expressed
●Report on internal control over financial reporting and
on compliance and other matters based on an audit of
financial statements performed in accordance with
Government Auditing Standards
o Audit not designed to express an opinion on internal control
o No significant deficiencies or material weaknesses reported
o No matters of noncompliance reported
Completing the process (continued)
7
SAS 114 letter to those charges with governance
o No uncorrected misstatements reported
o No material audit adjustments
o No difficulties working with the District
o No disagreements with management
Conclusion
●Questions?
8
15
RATE
EFFECTIVE DATE
7/1/2023
RATE
EFFECTIVE DATE
10/11/2023
3/4" T-10 8,417$ 8,081$ 930$
3/4" Mach 10 8,417$ 8,081$ 1,035$
1"14,030$ 13,468$ 1,100$
1 1/2"28,060$ 26,935$ 1,495$
2"44,895$ 43,096$ 1,780$
3"89,790$ 134,675$ 7,515$
4"140,297$ 336,687$ 10,030$
6"280,595$ 538,698$ 15,875$
8"785,667$ 1,077,396$ 17,360$
10"1,178,500$ 1,750,768$ 22,355$
12"2,244,790$ 2,154,791$ 2,244,790$
CAPACITY CHARGE METER
CONNECTION
CHARGE
METER
SIZE
Service Installation Benchmark Costs
Installation charges will be estimated by the District based on availability of District staff
to complete the work-site specific construction conditions and requirements. The costs in
the table shown are benchmarks, or cost references to begin from, for a short or long-
side service installation based on requested meter size. Permitting, paving/concrete costs,
and non-typical conditions are not included and will need to be assessed per connection,
on a case-by-case basis. If the applicant elects not to have District staff complete the
installation, then an administrative fee of 5% of the estimate will be charged.
Replaces page 15 on the EVWD Schedule of Water and Wastewater Rates
and Charges.